If you’re currently paying private mortgage insurance (PMI), you’re probably wondering when and how you can remove it. At North Star Mortgage Network, we’re often asked about terminating private mortgage insurance—and the truth is, it depends on a few key factors.

Whether you’re approaching 80% loan-to-value (LTV) or considering a property value reassessment, here’s everything you need to know about eliminating PMI from your conventional mortgage.

Four Options for Terminating Private Mortgage Insurance

1. Curtailments (Principal Paydown)

You can cancel PMI early by making extra payments (curtailments) to reach an 80% LTV based on the original property value (purchase price or appraised value—whichever is lower). Before sending funds, contact your lender to confirm the required payoff amount and potential valuation requirements.

  • An AVM (Automated Valuation Model) is typically used at no cost to verify the property value.
  • If the AVM isn’t sufficient, you may be required to pay for a BPO (Broker Price Opinion) or appraisal.

2. Natural Amortization

This occurs when your mortgage balance naturally declines to 80% of the original value simply by making scheduled payments. At that point, you may request PMI cancellation.

  • Just like curtailments, this may still require a valuation to verify that the property value hasn’t declined.

3. Automatic Cancellation

PMI is automatically removed when your loan reaches 78% LTV based on the original amortization schedule. This happens without needing to make a request—but curtailments won’t speed this up.

4. Current Value Cancellation (Post-Appreciation or Renovation)

You may request PMI cancellation based on the home’s current value instead of its original value, depending on the loan’s age:

  • < 2 Years: Must prove structural improvements and pay for an appraisal.
  • 2–5 Years: Must have at least 25% equity and pay for a valuation.
  • 5+ Years: Must have 20% equity and pay for a valuation.

Valuation Requirements and Costs

Valuations must be ordered through Fannie Mae or Freddie Mac tools. Original appraisals from your closing cannot be used. Borrowers are responsible for these fees:

  • Broker Price Opinion (BPO): $150–$200
  • Full Appraisal: $450–$775

Your lender cannot override the investor’s valuation decision, so it’s essential to meet both LTV and guideline requirements.

Additional PMI Termination Conditions

To successfully cancel PMI, you must also:

  • Be current on your mortgage payments
  • Have no 30-day late payments in the past 12 months
  • Have no 60-day late payments in the past 24 months
  • Maintain the same occupancy status as when you closed (i.e., still your primary residence)

Once approved, PMI termination typically takes up to 30 days. Your monthly mortgage payment will be updated and a new billing statement will be issued.

Why PMI Removal Matters

PMI can add hundreds to your monthly payment, especially in today’s rate environment. If your home has appreciated—or you’ve been paying diligently for a few years—removing PMI can free up funds to pay down principal, invest, or save.

Let’s Review Your Options Together

At North Star Mortgage Network, we’re committed to helping Florida homeowners understand every option available—including terminating private mortgage insurance. If you’re unsure of where you stand or want help evaluating your LTV, get in touch today. We’re happy to help you strategize the best path forward.

Posted in blog