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I called my lender last week. I am close to owning 20% of my home and want to get rid of PMI. They said I can only do it by remortgaging my house. Is that true? With the mortgage rates increasing, I will definitely lose some money by remortgaging the house.

Also, I know that I can request the PMI charge to stop if I own 20% of the value of the home, or it will stop automatically once I own 22% of the value. Is it possible that the lender meant I can't do it with 20% but it will be done at 22% automatically without the need to remortgage the house?

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    Is it an FHA loan? – TTT Feb 20 '18 at 22:18
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    Are you close to 20% based on the original appraised value or based on current value? – Hart CO Feb 21 '18 at 1:03
  • Not FHA. And I bought the house a year ago so the value hasn't changed much - I guess the answer is both current value and original appraised value. – Phil Feb 21 '18 at 13:37
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    A year. Did you put a downpayment of 15% or more, so you were a short time away from 20% to start? – JoeTaxpayer Feb 21 '18 at 15:32
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If this is your primary residence, it is not true. As specified in the Homeowners Protection Act:

  • At 80%, if your account is in good standing, you can show that the value of the property has not declined, and you can show that there are no other liens on the property, you can request in writing for PMI to be removed.

  • At 78%, PMI must be removed automatically.

Lenders can be slow to act on either of these, however (see After hitting 80% LTV, my mortgage lender refuses to remove PMI. Any recourse?). Keep written records of your contact, and if they refuse to comply, bring it to the attention of the Consumer Finance Protection Bureau.

More details can be found here on nolo: Getting Rid of PMI

  • And at 80% I would have to remortgage, is that right? – Phil Feb 21 '18 at 13:37
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    Technically you can ask, and if you're in good standing and you can prove the value of the home hasn't gone down, then you request its removal at 80%. However, in practice, the bank can drag their feet, so it can depend on how strongly you push them, but the law is on your side. I've edited the answer. – Magua Feb 21 '18 at 15:18
  • if they realize you’re really going to remortgage, they probably will agree to remove it. – Aganju Feb 21 '18 at 23:21

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