How to Remove PMI on a Conventional Loan in Maryland

Conventional Loan

How to Remove PMI on a Conventional Loan in Maryland

Reviewed by the HomeMath editorial team Updated 2026-08-04

Key takeaways

Private Mortgage Insurance (PMI) is automatically terminated by law once your loan balance reaches 78% of the original home value, provided you are current on payments.
You can request early cancellation once your principal balance hits 80% of the original value, typically requiring a formal written request and a clean payment history.
Maryland homeowners can often trigger removal sooner via an appraisal if home values have risen significantly, though lenders usually require at least two years of ownership for this method.
Most Maryland real estate transactions utilize title companies for closing rather than attorneys, which simplifies the process of obtaining documentation for your initial property appraisal.

Private Mortgage Insurance (PMI) is a protective layer for lenders, not for you. It allows borrowers to purchase a home with a down payment of less than 20% by shifting the risk of default away from the lender. While it serves a functional purpose at the start of your homeownership journey, it is an additional monthly cost that you should aim to eliminate as soon as your equity position improves.

The Automatic Termination Schedule

Under the federal Homeowners Protection Act, your lender is legally required to drop PMI automatically when your mortgage balance reaches 78% of the home's original purchase price. This calculation is based on the original appraisal or purchase price, whichever is lower. You do not need to do anything for this to occur, provided you are current on your mortgage payments. If you are not current, the termination date is delayed until the first day of the month following the date you become current.

Requesting Early Cancellation

You do not have to wait for the automatic 78% threshold. Once your loan-to-value (LTV) ratio hits 80% based on your original amortization schedule, you have the right to submit a written request to your loan servicer to cancel PMI. To succeed with this request, you must have a good payment history, meaning no 30-day late payments within the last year and no 60-day late payments within the last two years. The lender may also require a certification that there are no junior liens, such as a second mortgage or home equity line of credit, on the property.

Leveraging Market Appreciation

If your home’s value has increased significantly since you bought it, you may be able to remove PMI before your principal balance hits 80% of the original purchase price. This involves requesting a new appraisal to prove that your current equity is at least 20% of the home's current market value. In Maryland, where many suburban markets have experienced steady appreciation, this is a popular route for homeowners who have performed renovations or benefited from neighborhood growth.

Keep in mind that lenders have strict standards for this process. They typically require you to have owned the home for at least two years. If you have owned the home for five years or more, the equity requirement is often lowered to 25%. You will generally be responsible for the cost of the new appraisal, which must be performed by a professional approved by your lender.

The Role of Maryland Closing Practices

In Maryland, the closing process is typically facilitated by a title company rather than an attorney. This is a helpful detail when you are preparing for PMI removal, as title companies maintain comprehensive records of your original closing documents, including the initial appraisal. If you need to prove the original value of your home to your lender to initiate the PMI removal process, reaching out to the title company that handled your settlement is often the fastest way to retrieve the necessary paperwork.

This information is for educational purposes only and does not constitute financial or legal advice. Mortgage guidelines can vary by lender and investor requirements (such as Fannie Mae or Freddie Mac). Always contact your current mortgage servicer directly to confirm their specific procedures for requesting PMI removal and to verify your current loan-to-value status.

FAQ

Does paying extra toward my principal help remove PMI faster?

Yes. By making additional payments specifically toward the principal balance, you reach the 80% loan-to-value threshold sooner. Ensure your payment is marked as a 'principal-only' payment to avoid the bank applying it to future interest.

What happens if my lender refuses to accept an appraisal for PMI removal?

Lenders have the right to approve the appraiser and set specific equity thresholds. If they refuse, it is often because you haven't met the two-year ownership rule or the property has not appreciated enough to meet their internal risk guidelines.

Does PMI removal happen automatically if I refinance?

If you refinance your mortgage, the new loan is treated as a new transaction. If your new loan amount is 80% or less of the home's current appraised value, your new loan will not have PMI.

Is PMI different from FHA mortgage insurance?

Yes. PMI applies to conventional loans and can usually be removed. FHA loans carry Mortgage Insurance Premiums (MIP), which, for most borrowers, remains for the entire life of the loan regardless of equity.

Estimate your monthly payment →