When can I cancel PMI on a conventional loan?
Ask your servicer in writing once your balance is scheduled to reach, or has reached, 80% of the original value. You need a good payment history, to be current, no second liens, and usually an appraisal showing the value hasn't dropped. Original value is generally the lower of the price or the appraisal.
Those are the federal rules the CFPB (opens in a new tab) describes for single-family homes you live in, on loans closed on or after July 29, 1999. Even if you never ask, PMI has to end on its own at one of two points.
| Route | When | What you do |
|---|---|---|
| You request it | Balance reaches 80% of original value | Write to your servicer; meet the conditions above |
| Automatic | Balance is scheduled to reach 78% of original value | Nothing, as long as you're current |
| Final | The month after the loan's midpoint | Nothing, as long as you're current |
Paying extra toward principal moves you to the 80% line sooner. Your monthly statement or a call to your servicer will tell you where your balance stands.
Can a rise in my home's value end PMI sooner?
Sometimes. If Fannie Mae owns your loan, you can ask to cancel PMI based on a new appraisal of today's value. You generally need a balance at or below 75% of that value after two to five years, or 80% after five, plus a clean recent payment history.
The federal rules above use the value when you bought. Fannie Mae's servicing rules (opens in a new tab) add the current-value route, measured by an appraisal with an interior and exterior inspection. The full conditions:
- One-unit home you live in, or a second home, owned 2 to 5 years: balance at 75% of today's value or less.
- Same home, owned more than 5 years: 80% of today's value or less.
- Made improvements that added value? The two-year wait can be waived, at 80%.
- Two- to four-unit home you live in, or a rental: 70%, after more than two years.
- In every case: no payment 30 days late in the last 12 months and none 60 days late in the last 24.
Ask your servicer who owns your loan before you order anything. Freddie Mac and private investors set their own current-value rules, so the figures above apply only to Fannie Mae loans.
How long does FHA mortgage insurance last?
It depends on your down payment. For FHA case numbers assigned on or after June 3, 2013, if you borrowed 90% or less of the value, the annual premium runs for 11 years. If you borrowed more than that, it runs until the end of the loan term or 30 years, whichever comes first.
That's FHA Mortgagee Letter 2013-04 (opens in a new tab). The PMI cancellation rights above don't apply to FHA loans, and VA loans follow their own rules too. Put another way: if you put down less than 10%, you're usually in the second group.
Should I refinance to get rid of mortgage insurance?
It can make sense, if your home has gained value and you're paying FHA premiums with years left to run. A new conventional loan with enough equity may not need mortgage insurance. Weigh that against closing costs, the rate you'd give up and how long you'll stay in the home.
Before you apply, look at what homes like yours in Las Vegas, Henderson or Reno have sold for recently — the appraisal decides your equity. Your Loan Estimate shows every closing cost.
Refinancing to remove mortgage insurance can lower your monthly payment, but it resets your loan term and comes with closing costs. By refinancing your existing loan, your total finance charges may be higher over the life of the loan.
What if my servicer won't respond?
Put your request in writing and keep a copy. If a Nevada-licensed lender or servicer doesn't follow the rules, you can file a complaint with the Nevada Division of Mortgage Lending, and you can look up any Nevada mortgage company or loan officer's licence before you work with them.
Both are on the Division's site: submit a complaint (opens in a new tab) or look up a licence (opens in a new tab).
More on this: Refinance
