Removing PMI: original value, balance and written requests
Understand the difference between requesting PMI cancellation and automatic termination, and identify the documents and conditions your servicer needs.
What matters before you decide
For many conventional mortgages, federal rules distinguish a borrower request at 80% of original value from scheduled automatic termination at 78%, subject to conditions. Identify the loan and insurance type first: FHA mortgage insurance, VA arrangements and lender-paid insurance follow different rules.
- Confirm loan and insurance type.
- Get the original value and scheduled balance milestones.
- Request the servicer's exact criteria before paying valuation fees.
Identify what you are paying
Find the mortgage-insurance line in the statement and read the closing documents. PMI protects the lender, whereas homeowners insurance protects covered property risks. Removing one does not remove the other. Ask the servicer to confirm whether the policy is borrower-paid conventional PMI and which cancellation rules govern your loan.
Distinguish scheduled milestones from appreciation
Under the federal framework described by CFPB, original value usually means the lower of purchase price or appraisal at purchase; a refinance generally uses the refinance appraisal. Request cancellation when the scheduled balance reaches 80%, or when extra payments bring it there. The request must meet conditions including payment history, current status, absence of junior liens and evidence that value has not declined.
Automatic termination is generally tied to the date the balance is scheduled to reach 78%, with current payments required. A higher online value estimate alone does not trigger this milestone. Investor rules may provide other routes using current value, seasoning and a required valuation; get those terms in writing.
Prepare a documented request
Ask for the scheduled cancellation date, applicable criteria, accepted valuation provider and fees before ordering an appraisal. Send the request through the specified channel, retain confirmation and inspect later statements. A simple planning estimate is original value × 0.80; subtract that from the current principal to see the balance reduction needed, without treating it as approval.
Decision checklist
- Confirm loan and insurance type.
- Get the original value and scheduled balance milestones.
- Request the servicer's exact criteria before paying valuation fees.
- Verify cancellation in subsequent statements.
Frequently asked questions
01Does 20% equity automatically remove all mortgage insurance?
No. Loan type, valuation basis, schedule, payment status and governing rules matter. Confirm the actual policy before relying on a percentage.
02Should I order an appraisal first?
Ask the servicer which valuation is accepted and whether other requirements are met first. An unsolicited appraisal may not qualify.
Primary sources and further reading
Always verify the date, scope and local application before using a source for a specific decision.
Independent educational information. Not legal, tax, lending, or investment advice. Verify local rules and consult licensed professionals before making a real estate decision.
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