You buy a $300,000 home
You put 5% down ($15,000), leaving a $285,000 mortgage. That's a 95% loan-to-value (LTV) ratio at closing.
Your home may have gained value since you bought it. That could put you closer to canceling private mortgage insurance—if you qualify under your loan servicer's rules. Let's help you understand the numbers.
FIND OUT HOW PMI WORKS ↓PMI stands for Private Mortgage Insurance. On many conventional loans, lenders require it when your down payment is less than 20%. It protects the lender if you default—not your home's value and not your personal equity. It can help you buy sooner with a smaller down payment, but it is an added borrowing expense.
You put 5% down ($15,000), leaving a $285,000 mortgage. That's a 95% loan-to-value (LTV) ratio at closing.
Because your initial equity was less than 20%, PMI may be required. The premium depends on your loan and insurance terms.
As you pay down the loan—or if your home appreciates and your servicer allows current-value cancellation—you may qualify to ask for its removal.
It helps support the original loan with a smaller down payment. Once your loan meets the applicable cancellation rules, you may no longer need to pay for those “training wheels.”
Equity is the difference between your home's estimated value and what you owe. LTV is what you owe divided by the property's value. Lower LTV usually means more equity.
Less a $270,000 mortgage balance = $80,000 estimated equity (about 22.9%). Current LTV is about 77.1%.
That may look promising—but current-value PMI removal depends on the servicer's actual loan rules and approved valuation.
Federal cancellation rights generally use the property's original value for the 80% request and 78% automatic termination rules. Some loan investors also allow earlier cancellation based on current value, under different conditions.
Those are two separate routes, and they must not be confused.
Move beyond “I think my home went up.” Enter your estimated value, mortgage balance, and monthly PMI payment to see your numbers. This is an educational illustration—not a lender eligibility decision.
This does not determine PMI eligibility. Ask your mortgage servicer for the applicable rules.
$125 per month is $1,500 per year. Over two years, that's $3,000 in premiums—if the amount stays unchanged and the insurance remains in place.
Potential avoided future PMI payments only if your servicer approves cancellation. Not guaranteed savings; loan terms, eligibility, timing, and appraisal costs matter.
And here's the twist: if you're already eligible under the original-value rules, you may not need to order your own appraisal at all. **Call the servicer first.**
For many covered conventional mortgages, these are the primary paths. Exact requirements depend on loan type, payment history, investor rules and your servicer.
Generally, you can request cancellation at the eligible 80% threshold, provided payment-history and other requirements are met. The servicer may require verification that value hasn't declined.
PMI generally terminates automatically when your loan is scheduled to reach 78% of original value, if you're current. Other statutory termination provisions can apply.
Some loan programs permit borrower-requested cancellation based on current property value, with seasoning, LTV, payment-history, and servicer-approved valuation requirements.
Example: under Fannie Mae's current-value rules for an eligible one-unit principal residence, typical LTV limits are 75% at 2–5 years and 80% after 5 years, with defined exceptions for qualifying improvements. This is not a universal requirement for every lender or loan.
If your neighborhood's sale prices have climbed since you purchased, a current-value analysis can document what the property may be worth now. Your servicer determines whether that supports cancellation.
An addition or meaningful renovation may influence market value. The servicer may ask for dates, scope, invoices, and an approved valuation; routine repairs aren't always treated the same as qualifying improvements.
The lender or mortgage servicer may order an appraisal, broker price opinion, or another valuation through its own approved process. A homeowner-ordered report may not be accepted.
A private appraisal can help you evaluate your home's market value before exploring options, but it should be ordered with the understanding it may not satisfy the servicer's PMI requirements.
Before purchasing an appraisal, contact your loan servicer. Ask whether your loan qualifies for PMI cancellation and whether an appraisal is required, who must order it, what format they accept, and who pays the valuation fee. If they must order it, use their process.
An appraisal is an independent opinion of market value developed for a specific assignment. That makes it useful—but the mortgage servicer controls the cancellation review.
Some programs require the servicer to arrange an appraisal or other valuation through an authorized provider. Ordering directly from TVA before confirming the requirements may mean paying for a report your lender cannot use.
Our approach: we clarify the intended use and intended users before accepting a PMI-related assignment. If the lender requires an appraisal through its own ordering channel, we will not represent a private appraisal as a substitute.
At TVA, our work starts with the subject property and relevant local market evidence—not a desired value outcome. We serve the St. Louis and Kansas City, Missouri markets with independent real estate valuation services.
Analysis informed by nearby market activity, neighborhood conditions and property characteristics.
We consider the features and condition relevant to the agreed valuation assignment.
We discuss the purpose, valuation scope, ordering requirements, fee and anticipated timing before proceeding.
Assignment acceptance depends on property type, location, applicable licensing and independence requirements, and whether the proposed appraisal is appropriate for its intended use.
Confirm cancellation eligibility and whether it requires an approved appraisal. Get instructions in writing when possible.
If a private appraisal is appropriate—or your servicer directs the assignment to us—share the property address, purpose, and any written requirements.
We complete the agreed appraisal and deliver it to the authorized client. Your servicer makes the final decision about PMI cancellation.
No. Private mortgage insurance is primarily designed to protect the lender if the borrower defaults. It is not unemployment coverage or homeowners insurance.
Not always. Cancellation rights based on original value differ from current-value programs, and payment history, loan age, liens, and mortgage-servicer rules can matter. Ask your servicer which path applies.
Possibly, but not always. Some cancellation pathways do not require you to hire a private appraiser. If a valuation is required, your servicer may need to order it through an approved process. Verify before spending money.
Online estimates may signal that your market has changed, but they are not necessarily an accepted PMI cancellation valuation. An appraiser develops an opinion for the identified assignment based on property-specific information and market evidence.
Tell your servicer what changed and when. Some current-value PMI programs provide exceptions for qualifying improvements, but requirements vary. Keep receipts, permits, photographs, and descriptions of work.
PMI generally refers to mortgage insurance on conventional loans. FHA loans use mortgage insurance premiums (MIP) under different rules. A new home appraisal by itself does not automatically remove FHA MIP.
No. PMI removal affects the mortgage-insurance charge. It does not, by itself, change your interest rate, principal balance, property taxes, or homeowners insurance.
The servicer may require the borrower to pay a valuation fee, depending on the applicable program and process. Ask about fees before approving the order.
No. TVA provides independent appraisal services when appropriate. The mortgage servicer and applicable loan program decide whether PMI can be canceled and what valuation evidence they will accept.
Fees depend on the property, scope, location and reporting requirements. We provide a quote after confirming that the requested service is appropriate. Check with your servicer before ordering a private report.
Educational information only. For authoritative borrower guidance, see the Consumer Financial Protection Bureau, Fannie Mae's servicing guide, and HUD's FHA insurance guidance.
Already talked to your servicer and confirmed what kind of appraisal you need? Tell True Value Appraisal about your property and the required scope.
REQUEST AN APPRAISAL →St. Louis & Kansas City, Missouri · Servicer approval of PMI cancellation is not guaranteed.