Unlocking Your Home’s Hidden Treasure: How to Bid Farewell to PMI

Are You Overpaying? Let’s Find Out!

Let’s talk about a common financial drain—Private Mortgage Insurance (PMI). If you’ve been a homeowner for more than two years and are still paying PMI, you could be spending hundreds of extra dollars each month unnecessarily. The bank may appreciate it, but your wallet won’t!

Understanding PMI: What You Need to Know

PMI is required when your down payment is less than 20% of the home’s purchase price. It protects the lender—not you—until your equity reaches a certain threshold. The good news? PMI doesn’t have to be forever. Here are some ways to eliminate it:

1. Automatic PMI Cancellation

Thanks to the Homeowners Protection Act of 1998, PMI is automatically removed when your mortgage balance reaches 78% of the home’s original value (22% equity). No action is needed on your part—it just happens! However, lenders don’t track your home’s appreciation—just your loan balance.

2. Request Early PMI Removal

You don’t have to wait for automatic cancellation! You can request PMI removal once you reach 20% equity based on your home’s original value. Keep in mind that lenders may require a solid payment history before granting approval.

3. Pay Down Your Loan Faster

Want to speed up the process? Consider these strategies:
✔ Make extra mortgage payments when possible.
✔ Switch to biweekly payments (this results in an extra mortgage payment per year).
✔ Apply tax refunds or work bonuses toward your loan balance.

4. Get a Home Appraisal

If your home’s value has increased, you may already have 20% equity—even if your original down payment was lower. You can request an appraisal to prove it! Before doing this, check your neighborhood’s property values to see if this makes financial sense.

👉 Thinking about renovations to boost home value? Check out 5 Home Improvement Projects That Pay Off.

5. Refinance to Remove PMI

Refinancing your mortgage can be a great way to eliminate PMI—especially if interest rates have dropped. When refinancing, lenders will require a new home appraisal. If you’ve hit 20% equity, PMI could disappear entirely!

Ready to Ditch PMI? Here’s What to Do Next:

✔ Check your mortgage statement for your loan provider’s contact info.
✔ Call and request a PMI removal review or an appraisal.
✔ Be prepared for an appraisal cost ($300–$800), but remember—it’s a small price compared to the thousands you’ll save.

🔎 Want to know your home’s current value? Contact me, and I’ll provide a home equity checkup to see if you qualify for PMI removal. If you’re outside the Charlotte, NC, area, I can connect you with a trusted real estate expert near you!

💡 Note: If you have an FHA loan, PMI cannot be removed.