PMI Removal Appraisal

PMI Removal Appraisals

Private Mortgage Insurance (PMI) is required by lenders when a borrower's loan-to-value (LTV) ratio exceeds 80% — meaning the borrower has less than 20% equity in the property. PMI protects the lender (not the borrower) and adds a monthly cost to the homeowner's mortgage payment that can range from $100 to $300 or more depending on the loan amount and terms.

If your property has appreciated in value since you purchased it, you may have enough equity to request PMI removal — even if you haven't paid down your mortgage to 80% LTV based on the original purchase price. A current appraisal establishing higher market value can demonstrate that your LTV has dropped below the 80% threshold.

How PMI Removal Works

Under the Homeowners Protection Act, borrowers have the right to request PMI cancellation once their LTV reaches 80% of the property's current value. Most lenders will accept a current appraisal as evidence. The process typically works like this: contact your lender to request PMI removal and ask about their specific appraisal requirements, order a certified appraisal establishing your property's current market value, submit the appraisal to your lender for review, and if the appraisal demonstrates sufficient equity, the lender removes PMI from your payment.

When PMI Removal Makes Sense

In markets like Westchester County, Manhattan, and Greenwich, property values have appreciated meaningfully in recent years. Homeowners who purchased within the last 5-10 years with less than 20% down may now have sufficient equity to eliminate PMI. The cost of the appraisal is typically recovered within a few months of PMI savings.

For example, if you purchased a home for $600,000 with 10% down ($540,000 loan) and the home has appreciated to $700,000, your LTV is now approximately 77% — well below the 80% threshold for PMI removal. The monthly savings from eliminating PMI can be significant.

Lender Requirements

Each lender has specific requirements for the type of appraisal they'll accept for PMI removal. Some require a full interior and exterior appraisal, while others may accept a drive-by or desktop review. We can provide whatever form of appraisal your lender requires. Contact your lender first to confirm their requirements, then reach out to us to schedule.