1. What is PMI Removal?

Private Mortgage Insurance (PMI) is typically required when your loan-to-value ratio (LTV) is greater than 80%. This calculator helps determine when you can request removal of PMI, which generally occurs when your LTV reaches 78%.

2. How Does PMI Removal Work?

The calculator uses the following calculation:

Where:

• Current Property Value — The present appraised value of your home
• 0.78 — The standard LTV ratio (78%) when PMI can typically be removed

Explanation: When your loan balance falls to 78% of your home's original value or current value (depending on lender requirements), you can request PMI removal.

3. Importance of PMI Removal

Details: Removing PMI can save homeowners hundreds of dollars annually. Understanding when you qualify for removal helps in financial planning and potentially refinancing decisions.

4. Using the Calculator

Tips: Enter your original property value, current loan balance, and current estimated property value. The calculator will show your current LTV and the balance at which PMI can be removed.

5. Frequently Asked Questions (FAQ)

Q1: Is 78% LTV the only requirement for PMI removal?
A: Most lenders require 78% LTV based on original value, but some may allow removal at 80% with a new appraisal and good payment history.

Q2: Does PMI automatically drop at 78% LTV?
A: For conventional loans, PMI must automatically terminate when you reach 78% LTV based on the original value, assuming you're current on payments.

Q3: Can I remove PMI before reaching 78% LTV?
A: Some lenders allow early removal with a new appraisal showing sufficient equity, typically after 2 years of payments.

Q4: How often should I check my PMI removal status?
A: Review annually or after significant home improvements that may increase your property value.

Q5: Does this apply to FHA loans?
A: No, FHA loans have different rules. For loans after 2013, MIP (their version of PMI) typically lasts the life of the loan.