The LTV on my 30-year mortgage recently decreased to 79%, and I called the lender to drop the PMI on my loan. The customer service representative to whom I spoke said that there would be $400-$500 fee for an appraisal. However, if I waited until the LTV decreased to 78% the PMI would be automatically removed. The PMI on my loan is approximately $62/month, and according to my amortization schedule it will take 13 months to reduce the LTV to 78%. During that time I would pay about $800 in PMI as opposed to the $500 fee for the appraisal.
Are there any disadvantages to dropping the PMI now instead of next year when it is automatically dropped at 78%?