PMI Removal

Is it time to stop paying PMI?

Private Mortgage Insurance let you buy with a lower down payment, but you do not need to pay it for the life of the loan. PMI is a monthly escrow payment you could be keeping in your own bank account.

In California, PMI is no longer required once you have 20% equity, whether through paying down principal, market appreciation, or improvements. Once there, you can request cancellation in writing with proof of equity.

Prove your equity

The Homeowners Protection Act requires servicers to disclose PMI cancellation conditions, and in most cases a state-certified appraisal is the proof of equity a lender accepts. You do not have to wait for a notification: order the appraisal, confirm 20% equity, and cancel with a single letter.

A lower payment, starting now

PMI helped when you needed it. When it stops being necessary, eliminating it frees money for maintenance, savings, or investment. Contact us for a free quote and take the first step toward a lower monthly payment.

Who orders this appraisal

• Homeowners with conventional loans
• Mortgage brokers

The rules that govern it

Homeowners Protection Act of 1998, 12 U.S.C. §4901 et seq., The federal statute governing private mortgage insurance on conventional loans. It creates two thresholds: cancellation on borrower request at 80% loan-to-value, and automatic termination at 78%.

"Original value", the point everyone misses, Both thresholds are measured against ORIGINAL value, defined as the lesser of the purchase price or the appraised value when the loan was made. Not current market value. This means appreciation alone does not give you a statutory right to cancel, no matter how much the property has gone up. A great deal of published advice on this is simply wrong.

Where an appraisal does help under the HPA, On a borrower-requested cancellation the holder may require evidence that the property value has NOT DECLINED below its original value, and that no subordinate liens exist. That is a real appraisal need, but the question being answered is "has it held its value", not "how much has it gained".

Cancelling on appreciation. An investor program, not a right, Fannie Mae and Freddie Mac operate their own programs allowing cancellation based on current value, subject to seasoning periods and their own LTV thresholds. Those are investor guidelines your servicer chooses to apply, not HPA entitlements, and the terms differ by investor and change over time. Ask your servicer which program applies before ordering anything.

Conventional only, FHA is a different system, The HPA governs private mortgage insurance on conventional loans. FHA mortgage insurance premium follows separate HUD rules, and on many post-2013 FHA loans the premium runs for the life of the loan and cannot be appraised away at all. If your loan is FHA, confirm with your servicer before spending money on an appraisal.

How it works

1. Ask your servicer FIRST which route applies, HPA cancellation, or its investor’s appreciation-based program, and what evidence it will accept. This one call prevents most wasted appraisals.
2. Confirm whether the servicer requires an appraiser it selects or from an approved panel. An appraisal the borrower orders independently is frequently rejected.
3. Confirm the effective date and reporting form the servicer needs.
4. Complete the appraisal to that specification and deliver it as the servicer directs.

What you receive

Current-date appraisal suitable for submission to a loan servicer. Standard turnaround is 1–3 weeks. Rush appraisals available for urgent deadlines.

Common questions