Did You Know You Can Request an Appraisal to Remove Your PMI?
If you’re a homeowner, there’s a chance you’re paying for something every single month that you may not need anymore… and it could be costing you hundreds—or even thousands—of dollars a year.
It’s called PMI, and the good news is: You may be able to remove it with an appraisal.
Let’s break it down.
What Is PMI?
Private Mortgage Insurance (PMI) is a type of insurance that protects your lender—not you—if you stop making payments on your loan.
PMI is typically required when:
You purchase a home with less than 20% down, or
Your loan-to-value ratio (LTV) is above 80%
In simple terms, PMI exists because the lender is taking on more risk when you have less equity in your home.
Why Do Homeowners Pay PMI?
When you buy a home without a full 20% down payment, lenders use PMI as a safeguard. It allows buyers to purchase a home sooner without waiting years to save a large down payment.
While this can be incredibly helpful upfront, PMI is meant to be temporary.
The goal?
Build enough equity in your home so the lender no longer requires it.
When Can PMI Be Removed?
Here’s where things get interesting and where many homeowners miss an opportunity to save money.
You can typically remove PMI when your home reaches 20% equity.
This can happen in a few ways:
You’ve paid down your loan over time
Your home has increased in value
You’ve made improvements that boost your property’s worth
And this is where an appraisal comes in.
How an Appraisal Can Help Remove PMI
If you believe your home has increased in value, you don’t have to wait years for your loan balance alone to catch up.
You can:
Request PMI removal from your lender
The lender may require a professional appraisal
The appraisal determines your home’s current market value
If your equity is now 20% or more, PMI can be removed
This is especially powerful in fast-growing areas (like much of North Alabama and Southern Tennessee), where property values may have risen significantly in recent years.
How Much Can Removing PMI Save You?
PMI typically costs 0.5% to 1% of your loan amount per year.
Here’s what that looks like:
$300,000 loan
PMI cost: ~$1,500–$3,000 per year
That’s $125–$250 per month
Over time, that adds up quickly.
Removing PMI could:
Lower your monthly payment
Free up cash flow for savings, investing, or home projects
Improve your overall financial flexibility
A Real Opportunity Many Homeowners Overlook
One of the biggest misconceptions we see is homeowners assuming:
“I’ll just wait for PMI to fall off automatically.”
While lenders are required to remove PMI at certain points, that timeline can be much longer than necessary.
If your home has appreciated in value, you may qualify much sooner—but only if you take action.
When Should You Consider an Appraisal?
You may want to explore this option if:
You’ve owned your home for a few years
Home values in your area have increased
You’ve renovated or improved your home
You’re unsure how much equity you currently have
Final Thoughts
PMI serves a purpose, but it’s not meant to be permanent.
A simple appraisal could be the key to:
✔️ Lower monthly payments
✔️ Greater financial freedom
✔️ Making your home work for you, not against you
Thinking About Removing Your PMI?
At Definitive Valuations, we help homeowners understand their property’s true value with accurate, professional appraisals.
If you’re wondering whether you’ve reached that 20% equity mark, we’re here to help guide you through the process.
Have questions about your home’s value or the appraisal process? Reach out. We’d love to help. (256) 828-9275
