"Private mortgage insurance (PMI) is an added monthly cost required on many conventional mortgages when a borrower puts down less than 20%. While PMI helps protect the lender-not the homeowner-it isn't meant to last forever. Once you've built enough equity in your home, you may be able to remove PMI and lower your monthly mortgage payment ."
"Automatic PMI termination at 78% LTV: Federal law requires lenders to automatically cancel PMI once your balance reaches 78% of the original value, as long as your loan is current. Early PMI removal using a new appraisal: If your home's value has increased, some lenders allow PMI removal earlier than scheduled by using a new appraisal to prove sufficient equity."
Private mortgage insurance (PMI) is a borrower-paid protection for lenders on conventional loans when the down payment is under 20%. PMI increases monthly housing costs but can be removed once homeowners build sufficient equity. PMI removal options include a formal request at 80% loan-to-value if eligibility and payment requirements are met, automatic termination by federal law at 78% LTV when the loan is current, or earlier removal if a new appraisal shows increased home value. The Homeowners Protection Act and servicer guidelines govern cancellation rules. Removing PMI lowers monthly payments and reduces total mortgage costs.
Read at Redfin | Real Estate Tips for Home Buying, Selling & More
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