The mortgage rule is that once your LTV goes below 78 percent of the home’s value, you can get PMI removed. The lender gets a piece of the PMI premium paid each month.  So if you forget you are paying PMI, as your home value goes below 78 percent, the lender continues to profit from your lack of removing it.

Today, lenders must remind the borrower each year, that they are paying PMI, but it is the responsibility of the borrower to have it removed.

Guidelines For Removing PMI

• The borrower must get an appraisal, paid for by the borrower, showing the current value of the home.
• The LTV must be under 78 percent.
• Each lender has their own guidelines but at least 12 to 24 timely payments must have been made.  Most lenders will require a minimum of 24 months but check to make sure.
• There can be NO LATE PAYMENTS.
• There can be no secondary loans bringing the combined LTV over 80 percent.

Each lender has there own rules.  Prepare to jump through several hoops to remove your PMI.  It’s a pain and time consuming but you’ll save money in the end.