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PMI Removal Appraisals

If you put down less than 20% you are probably paying private mortgage insurance. It protects your lender, not you, and once you have enough equity it should stop. An appraisal is usually how you prove you do.

What the law actually provides

The Homeowners Protection Act of 1998 governs PMI on most single-family primary residences with loans originated after 29 July 1999. It sets out two distinct mechanisms, and they are commonly confused:

• Automatic termination. The servicer must end PMI when the loan balance is scheduled to

reach 78% of the original value, provided you are current. This happens without you asking, and it uses the original value — not today's.

• Borrower-requested cancellation. You may request cancellation at 80% of the original

value, in writing, if you are current and meet the servicer's conditions on payment history and additional liens.

Both statutory routes are keyed to the original value. So neither one is helped by your home having appreciated.

What appreciation can do is trigger a servicer's own policy, or the investor guidelines your loan sits under. Fannie Mae and Freddie Mac both publish criteria for cancellation based on a current appraised value, generally with a seasoning requirement and a stricter loan-to-value threshold where the equity comes from appreciation rather than payments. That route is contractual rather than statutory, and the servicer sets the rules — including, often, who may perform the appraisal.

Call your servicer before you order anything. Ask specifically: do you accept a borrower-ordered appraisal, or must it come through your panel; what LTV do you require; and is there a seasoning period. Ordering first and asking afterwards is how people pay for a report their servicer will not look at.

Different rules apply to FHA mortgage insurance, which is not PMI and in many cases cannot be cancelled by an appraisal at all.

What we do

A full interior appraisal on the appropriate form, or an exterior-only report where the servicer permits it. 6,474 of our assignments have been exterior-only single-family reports, so we can advise on which scope your servicer is likely to accept — though the servicer's answer is the one that counts.

Our experience

Appraising South Florida since 1992, 34,000+ appraisals. Residential only.

How the assignment runs

You call the servicer; we mean it enough to put it in every answer above. Once the servicer confirms it will accept a borrower-ordered appraisal and names the threshold, we inspect — full interior or the exterior-only scope some servicers accept — and deliver a report built to their stated requirement. Have the improvement list ready: updates since purchase are usually the whole reason current value clears the bar.

The arithmetic worth doing first

PMI costs a known amount per month; the appraisal costs a known amount once. If the loan balance is within striking distance of the servicer's threshold on current value, the appraisal typically repays itself in a few months of cancelled premiums and everything after is savings. If the numbers are not close, we say so when you call and you keep your money — check your last statement for the balance and have a realistic sense of neighbourhood values before ordering anything, including from us.

Call 561-853-2129 or use the contact form.

Questions we hear about this work

Can I drop PMI because my home went up in value?

Not under the statute — both statutory routes key to your original value. Appreciation works through your servicer's or investor's own policy for cancellation at current value, and the servicer sets those rules, including who appraises.

Should I order an appraisal before calling my servicer?

No — call first, always. Ask whether they accept a borrower-ordered appraisal or require their own panel, what LTV they need, and any seasoning rules. Order after you know the answer.

What paperwork does cancellation actually require?

A written request, current payments, and whatever valuation the servicer's policy specifies. Get their requirements in writing before spending anything.

Does this apply to FHA loans?

No — FHA mortgage insurance follows different rules and often cannot be cancelled by an appraisal at all. Know which loan you have before planning around PMI removal.