- Miller Samuel Real Estate Appraisers & Consultants - https://www.millersamuel.com -

PMI Gets You In The House: Now Get Rid Of It

percent [1] Homeowners can save thousands by canceling private mortgage insurance [PMI] [2]. PMI is an insurance on the top 20% of the loan [3] so the lender is assured that they will get the full 80% or balance of the funds outstanding if the property goes into foreclosure.

The Homebuyers Protection Act [4] was passed by Congress in 1998 requiring lenders to notify homeowners when the equity in their home reached a level where PMI was no longer required.

“Your home falls under this act if you purchased, constructed, or refinanced your single-family home after July 29, 1999, and your loan is not a government-insured FHA or VA loan. If you purchased your home before July 29, 1999, your lender is not required to cancel your PMI when you reach 20 or 22% equity, but many lenders will do so if you ask.”

How to Cancel PMI Here’s a great article on removing PMI from your loan [5] by Chip Wagner, an accomplished appraiser in the Chicagoland area. Most lenders require and approved and state certified appraiser to perform the evaluation.

Here’s how they do it in Minnesota. I suspect it is not much different than other states. [6]

Note: Check with your lender for specific instructions.