PMI Private Mortgage Insurance - How to remove it from your mortgage

Buyers with down payments of less than 10% are required to get mortgage insurance. These loans are risky 
as evidenced with the "sub-prime" mortgage crisis.

The amount of the insurance is often $40 to $50 per month for a $100,000 home.  This payment is typically added to the overall payment

Homeowners continue to pay the PMI even after their loan balance has dropped below the original 80 percent threshold, which occurs as the equity in the home increases.

Previously, lenders were under no obligation to inform borrowers when they had reached a point where the PMI could be removed. In 1999, when the Homeowners Protection Act took effect and this law now obligates lenders to terminate the PMI when the principal balance of the loan reaches 78 percent of the original loan amount. 

The law stipulates that, upon request of the homeowner, the PMI must be dropped when the principal amount reaches only 80 percent!  This law only applies to home loans - whether first time or refinances - that closed after July, 1999. Also certain other conditions must be met, such as being current on the loan payments. Buyers that purchased before July 1999 can also have their PMI removed.

The question is when does the equity exceed the 20 percent point? A state certified appraiser can provide an accurate appraisal to determine this.  

Cancellation of Private Mortgage Insurance: Federal Law May Save You Hundreds of Dollars Each Year

Private Mortgage Insurance (PMI): Law Requires Lenders to Cancel PMI

Got a Question?

Do you have a question relating to real estate appraisals? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.

Information
Question
NASA PHOTO OF THE DAY:
 
Hubble Captures an Active Galactic Center
6/30/2025 9:22 PM
This Hubble image shows the spiral galaxy UGC 11397, which resides in the constellation Lyra (The Lyre)...Read More
 
Astronaut Joe Engle Flies X-15
6/30/2025 9:22 PM
In 1963, Captain Engle was assigned as one of two Air Force test pilots to fly the X-15 Research Rocket aircraft. In 1965, he flew the X-15 to an altitude of 280,600 feet, and became the youngest pilot ever to qualify as an astronaut. Three of his sixteen flights in the X-15 exceeded the 50-mile (264,000 feet) altitude required for astronaut rating...Read More
 
Sparkling Andromeda
6/30/2025 9:22 PM
The Andromeda galaxy, also known as Messier 31 (M31), is the closest spiral galaxy to the Milky Way at a distance of about 2.5 million light-years. This new composite image contains data of M31 taken by some of the world’s most powerful telescopes in different kinds of light. This image is released in tribute to the groundbreaking legacy of Dr. Ver...Read More
 
Waning Crescent Moon
6/30/2025 9:22 PM
NASA astronaut Bob Hines took this picture of the waning crescent moon on May 8, 2022, as the International Space Station flew into an orbital sunrise 260 miles above the Atlantic Ocean off the northwest coast of the United States...Read More
 
NASA Astronaut Zena Cardman
6/30/2025 9:22 PM
NASA astronaut Zena Cardman inspects her spacesuit’s wrist mirror at the NASA Johnson Space Center photo studio on March 22, 2024...Read More
 
A Martian Volcano in the Mist
6/30/2025 9:22 PM
Arsia Mons, one of the Red Planet’s largest volcanoes, peeks through a blanket of water ice clouds in this image captured by NASA’s 2001 Mars Odyssey orbiter on May 2, 2025...Read More
 
Summer Begins in Northern Hemisphere
6/30/2025 9:22 PM
This full-disk image from NOAA’s GOES-13 satellite shows the Americas at the start of astronomical summer in the Northern Hemisphere on June 21, 2012...Read More
 
NASA’s Human Exploration Rover Challenge
6/30/2025 9:22 PM
More than 500 students with 75 teams from around the world participated in the 31st year of NASA’s Human Exploration Rover Challenge (HERC) on April 11 and April 12, 2025, near NASA’s Marshall Space Flight Center in Huntsville, Alabama. Participating teams represented 35 colleges and universities, 38 high schools, and two middle schools from 20 sta...Read More
 
Training for the Moo(n)
6/30/2025 9:22 PM
A curious cow watches as NASA astronauts Andre Douglas and Kate Rubins perform a simulated moonwalk in the San Francisco Volcanic Field in Northern Arizona on May 14, 2024...Read More
 
Hubble Studies a Spiral’s Supernova Scene
6/30/2025 9:22 PM
This NASA/ESA Hubble Space Telescope image features the barred spiral galaxy IC 758...Read More