How to Remove PMI on a Conventional Loan in Virginia

Conventional Loan

How to Remove PMI on a Conventional Loan in Virginia

Reviewed by the HomeMath editorial team Updated 2026-08-06

Key takeaways

Automatic PMI termination occurs when the loan-to-value ratio reaches 78% of the original value.
Borrowers can request PMI removal at 80% LTV after at least two years of on‑time payments.
Refinancing into a new conventional loan with 20% or more equity also eliminates PMI.

Private Mortgage Insurance (PMI) is required on most conventional loans when the borrower puts down less than 20% of the purchase price. It protects the lender in case the borrower defaults while the equity in the home is low.

How PMI is Cancelled Automatically

Under federal guidelines, lenders must automatically terminate PMI when the loan‑to‑value (LTV) ratio falls to 78% of the original purchase price, provided the borrower is current on payments. This rule exists to stop borrowers from paying insurance they no longer need once they have built sufficient equity.

Borrower‑Initiated Cancellation

If you prefer to cancel earlier, you can request removal once the LTV reaches 80% and you have at least two years of on‑time payment history. Lenders typically require a written request and may ask for a new appraisal to confirm the home’s value. The two‑year requirement protects the lender by ensuring the borrower has demonstrated reliable repayment.

Ways to Reach the Required Equity

Make extra principal payments to lower the balance faster.
Beneficial home‑value appreciation can also reduce the LTV, but most lenders still require an appraisal.
Refinance into a new conventional loan that does not require PMI once you have 20% or more equity.

Virginia‑Specific Considerations

Virginia law requires lenders to provide written notice of the right to cancel PMI once the 80% threshold is met.
Many Virginia transactions close with an attorney, which can make it easier to obtain the required appraisal and paperwork for PMI removal.

Before taking action, review your loan documents and contact your servicer to confirm the exact steps they require.

Disclaimer: This article provides general information only and does not constitute personalized financial or legal advice. Consult a qualified professional for advice tailored to your situation.

FAQ

Do I have to pay a fee to cancel PMI?

Most lenders do not charge a fee for PMI cancellation once the required equity and payment history are met, but some may require a one‑time processing charge. Review your loan agreement or ask your servicer for details.

Can I cancel PMI if my home’s market value has increased?

Yes, but lenders usually require a new appraisal to verify the higher value. The appraisal cost is typically the borrower’s responsibility.

What documents do I need to request PMI removal?

A written request, proof of on‑time payments (often a payment history statement), and, if the lender asks, a recent appraisal report showing the current home value.

Will refinancing always eliminate PMI?

Refinancing can remove PMI if the new loan’s LTV is 80% or lower. However, you’ll need to meet the lender’s credit and income standards, and closing costs may offset some savings.

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