Still Paying PMI? How and When You Can Drop It

Money Matters for Homeowners:

A Smart Tip That Could Save You Hundreds—If It Applies

Still Paying PMI? How and When You Can Drop It

Private Mortgage Insurance (PMI) doesn’t apply to every homeowner—but if it does apply to you, it’s worth knowing how to get rid of it.

Whether you bought your home with less than 20% down or know someone who did (maybe a child, friend, or client), here’s what to know—and what to check—if PMI is quietly costing more than it needs to.

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First, What Is PMI?

PMI is a type of insurance that protects the lender (not you) in case you default on your loan.
It’s usually required when a buyer puts down less than 20%—common for:

• First-time buyers
  
• Relocators using bridge loans or cash reserves elsewhere
  
• Upsizers stretching into a more expensive home
  
• Anyone buying during a fast-moving market without time to save a full down payment
  

PMI helped make the loan possible—but you’re not meant to pay it forever.

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When Can You Remove PMI?

There are a few ways to cancel PMI once you’ve built enough equity in your home. Here’s how it typically works:

1. Your loan balance is under 80% of your home’s value.

You can request PMI cancellation when you’ve reached 20% equity—either by paying down your loan or by seeing your home’s value rise.

You’ll likely need:

• A new appraisal (tax assessments don’t count)
  
• Proof that your home hasn’t declined in condition
  
• A strong payment history
  

📝 Tip: Check if your lender requires you to use their appraiser before paying for your own.

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2. Your loan balance reaches 78% automatically.

By law, lenders must cancel PMI once your loan hits 78% of the original value, as long as you’re current on payments. This typically happens on schedule over time, without needing to ask—though some lenders are slow to act.

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3. You’ve hit the halfway point of your loan term.

Even if your equity is below 22%, lenders must remove PMI by the midpoint of your loan (year 15 of a 30-year loan), provided payments are on time.

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Ways to Speed Up PMI Removal

• Make extra payments toward principal when possible
• Keep up with maintenance and repairs to protect your home’s value
• Don’t open a home equity loan—it reduces your overall equity
• Pay on time—late payments can delay your eligibility for cancellation

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A Couple of Notes for Florida Homeowners

Because Florida has seen steady home appreciation in many markets, there’s a chance you’ve reached 20% equity without realizing it.

If you relocated in the last 2–5 years or bought during a hot market using a low down payment, this might be a good time to revisit your loan details.

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The Bottom Line….

PMI made homeownership possible for many—but it’s not meant to last forever. If you’re still paying it, even quietly, it may be time to run the numbers and request removal.

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📩 Not sure how much equity you have—or whether it’s time to ask your lender about canceling PMI? Send me a quick message and I’ll help you figure it out, or connect you with a lender or appraiser who can assist.
→ april@planmyfloridamove.com

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