If you have a conventional loan, you should be able to apply to have your PMI removed when your loan-to-value (LTV) ratio falls below 75% to 80%, as long as you pay PMI separately. You should review your mortgage note to determine if you are required to pay PMI separately and understand the process for requesting the removal of PMI. Lenders typically require that borrowers pay for an appraisal report to determine the fair market value of the property used to calculate the current LTV ratio. The lender uses the current LTV ratio to decide if you meet the requirements to have PMI removed from your mortgage. The process for requesting the removal of PMI usually takes one-to-two months depending on the lender and the timing of the appraisal report. We provide a comprehensive overview of PMI, including how to request to have PMI removed from your mortgage, on FREEandCLEAR that you can review.
If your have a conventional mortgage and pay PMI separately but the lender refuses to remove the PMI despite meeting the necessary LTV ratio requirements as specified in your mortgage note, you should file a complaint with the Consumer Finance Protection Bureau (CFPB) as well as your state attorney general. You should also consider contacting a real estate attorney to pursue the matter with your lender. Because your mortgage note outlines the specific terms for your PMI in writing, there is relatively little interpretation involved in determining if you are required to pay PMI and you should be able to resolve the issue relatively quickly.
Please note that if PMI is included in your mortgage rate instead of you paying PMI separately, also known as lender paid PMI, then PMI cannot be removed from your mortgage unless you refinance, regardless of your LTV ratio and how much equity you have in your home. If PMI is included in your mortgage rate and you do not pay it separately (lender paid PMI), then PMI will not be outlined in your mortgage note and you are required to pay PMI for the life of your mortgage. Additionally, if you have a government-backed mortgage, such as an FHA or USDA mortgage, you are required to pay mortgage insurance premium for the life of your mortgage.