Once my loan to value ratio drops below 80%, can the MI be removed?
Yes. Lenders will allow borrowers to remove the MI requirement once the property’s appraised value increases such that the loan to value ratio is below 80%. The reality of trying to accomplish this can be somewhat challenging. Usually the lender will require that an appraisal be done by the lender’s approved appraisal companies. Contact your current mortgage holder to determine their policy on removing mortgage insurance from an existing loan. Another means to remove the MI is to refinance the original mortgage with the higher appraised value used to determine the new loan’s loan to value ratio. However, if the current first mortgage held by a borrower is at favorable terms, it is definitely worth working with the current mortgage holder to eliminate the MI premium.
