How to Get Rid of PMI Early

After a certain amount of time, your PMI will automatically disappear. Usually, this happens either when your mortgage balance reaches 78% of the appraised value of the home, or when your mortgage reaches the halfway point of the loan term. Usually, your mortgage lender will also be willing to remove your PMI once your mortgage balance reaches 80%.

If you are interested in removing your PMI payment sooner than that, there are a couple of other methods you can use to reduce PMI. Keep reading to learn more about how to remove PMI!
How to Get Rid of PMI

You already know that you can remove PMI by waiting until your mortgage loan balance reaches 78%. However, there are other ways to get rid of your PMI early to save money. If you have a good payment history, no other liens on your home, and proof that your home’s value has not fallen below the price you paid for it, your lender will likely be able to remove your PMI when your loan to value ratio reaches 80%. You can also get rid of your PMI by getting a new appraisal on your home. If your property value has risen, you might be able to get rid of your PMI. However, you should be aware that in order to cancel based on current value, you need to own your home for at least two years and have a 75% LTV, or 80% LTV if you have owned your home for 5 years. Finally, you can refinance to get rid of your PMI if interest rates have dropped and your new loan balance will be less than 80% LTV. However, be aware that you will have to pay closing costs, so weigh your options to ensure that you will save more than the refinance costs.