PMI Removal

Private Mortgage Insurance (PMI) is required when conventional loan-to-value (LTV) exceeds 80%. PMI can be removed when LTV drops below 80% based on the original purchase price (automatic at 78% under HPA), but you can request earlier cancellation if the current property value justifies an LTV below 80%. An appraisal documents the current value to support that request.

PMI typically costs 0.3%–1.5% of the original loan amount annually, depending on credit score, LTV, and loan type. On a $600,000 loan, that’s $1,800–$9,000 per year. Eliminating PMI through an early cancellation request can save significant money over the remaining loan term — often $20,000–$50,000+ in lifetime savings on typical homes.

For PMI cancellation, the appraisal must show that your current loan balance is 80% or less of the current property value. If your loan balance is $400,000, the appraised value must be at least $500,000 to qualify. Some lenders require even lower LTV thresholds (75%–78%) for cancellation. Check your lender’s specific requirements before ordering.

Lenders typically require the appraisal to be ordered through them, not the borrower. However, a private pre-screen appraisal can confirm whether your equity position justifies pursuing PMI removal — saving you the application fee if values don’t support cancellation. Once you’re confident of the value, you formally request cancellation through your lender, who orders their own appraisal.

On average, a full appraisal for PMI removal takes 3–4 business days from inspection to completion. Drive-by appraisals are typically faster (2–4 days), and desktop appraisals can deliver in 24–72 hours. The lender’s required scope determines which option is needed. Once you have the value, the PMI cancellation process through your lender typically takes another 30–60 days.