Will PMI automatically be cancelled or do i have to submit a request?

For non-FHA loans, mortgage insurance (PMI) can be cancelled when your mortgage balance reaches 80% of the original value used to make the loan. To do so, the borrower must make the request to the loan servicer. When the loan balance reaches 78% of the original value used to make the loan, the lender is required to cancel the PMI coverage automatically. These triggers were laid out in the Homeowner's Protection Act of 1998. You do not need an appraisal to either make the request or obtain the cancellation because the law stipulates that the original appraised value is to be used. Although it is true that since the HPA became law, many lenders have, in the past, agreed to use a new appraisal as the basis for determining value, but the law is very clear. Don't be surprised if your lender refuses to use a new appraisal. Why? In many cases a loan that had PMI, saw an increase in value, had the PMI cancelled by using an appraisal, only to have the value plummet over the last few years. Since PMI is intended to protect the lender's interest in the transaction, most are refusing to drop PMI except when the rules mandated by HPA are met. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ Licensed in California and Arizona ~ www.LoansA2z.com 888-889-9950

It depends on which type of loan you have now.. If it's conventional, then you will have to request it be removed, and the lender will require an appraisal (at your expense, usually $450 +-) And you have to have 20% or more in equity.. If it's FHA, then it's supposed to drop automatically once you have past the 5 year mark and you have paid down your original loan balance below 78%.. Notice the difference.. Conventional is based on the home's value, verified by appraisal... FHA is based on original loan amount, not its current value.... I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

This depends on the loan program you have. Typically, a FHA Insured Loan will automatically cancel once the Loan To Value is at 78%. I suggest you review your Mortgage & Note from your last financing to see what the terms of removing PMI are. You can always contact your servicer or lender as well to inquire. If I can be of any direct help, please let me know! Thank you.

Usually you will have to prompt your lender and possibly pay for an appraisal to prove your loan to value is 78% or below if you have an FHA loan and paid MI for at least 5 years and 80% or below if you have a conventional loan. It has been my experience that you will need to reach out to your lender and see what their procedure is. As a rule don't depend on a lender to just drop it.

What type of loan do you currently have?

If you are in a 30 year fixed FHA loan, the PMI should cancel automatically at 78%. If you are in conventional loan, you will need to have an appraisal done to prove your value. You should check with your bank as to what their requirements are as most banks will require you to use one of their approved appraisers.

You will definitely need to submit a request to your lender. They have no incentive to drop PMI from your loan. Typically, when your outstanding loan amount reaches 78% of the sales price or the appraised value, PMI can be eliminated.

You must submit a request. They will not automatically drop it -- Trust me. Andrew Alfonso

Submit the request on either to guarantee it gets dropped.

Like the others have said above, when you can cancel your PMI will depend on what loan program you have. Also, do not rely on your lender to automatically cancel PMI for you, you will have to request it.