Private Mortgage Insurance (PMI) protects the lender when a conventional loan’s down payment is less than 20% of the home’s value. While it adds to your monthly payment, the good news is that PMI does not have to stay forever.

Why PMI Can Be Removed

Federal law requires lenders to automatically terminate PMI when the loan balance reaches 78% of the original purchase price, assuming you’re current on payments. The law also allows borrowers to request cancellation earlier—once the balance drops to 80% LTV—provided you meet certain conditions.

Typical Triggers for PMI Cancellation

  • Automatic termination: Occurs at 78% LTV, usually after 22‑24 months of on‑time payments.
  • Borrower‑initiated request: Allowed at 80% LTV if you have a good payment history (typically 2 years) and can prove the home’s current value.

Steps to Request PMI Removal

  • Check your latest mortgage statement for the current loan balance.
  • Calculate the LTV: (Current balance ÷ Original purchase price) × 100.
  • If the LTV is 80% or lower, contact your servicer and ask for the PMI cancellation form.
  • Schedule a home appraisal (or provide a recent broker’s price opinion) to verify the property’s value.
  • Submit the appraisal, cancellation form, and any additional documents the servicer requires.
  • Once approved, the servicer will stop charging PMI on the next billing cycle.

Alternative Ways to Eliminate PMI

  • Pay extra toward principal: Accelerating payments reduces the balance and LTV faster.
  • Refinance: If you have at least 20% equity after a refinance, the new loan can be free of PMI.
  • Home value appreciation: In a rising market, your equity may increase without additional payments, potentially meeting the 80% LTV threshold sooner.

Utah‑Specific Tips

  • Many Utah closings are handled by title companies rather than attorneys, which can streamline the appraisal request process.
  • The Utah Housing Corporation offers first‑time‑buyer assistance programs that can help you reach a 20% down payment, avoiding PMI altogether on a new loan.

This article provides general information and does not constitute personalized financial or legal advice. For advice tailored to your situation, consult a qualified mortgage professional or financial advisor.