Executive summary

If you have private mortgage insurance (PMI) on a conventional mortgage, federal law and agency servicing rules allow you to ask your servicer to cancel PMI once you reach 80% loan-to-value (LTV) and require automatic termination when your loan reaches 78% LTV (subject to being current and meeting lender requirements). For FHA loans, mortgage insurance premium (MIP) rules changed in 2013 and many FHA borrowers now pay MIP for the life of the loan unless they meet specific exceptions or refinance into a conventional mortgage. Servicers and the investor (Fannie Mae/Freddie Mac) also have procedures for evaluating and processing cancellation requests. This guide gives the legal background, step-by-step removal process, lender example (U.S. Bank), an actionable checklist, and a sample letter you can use today. 0

What are PMI and MIP? (Short answer)

PMI (Private Mortgage Insurance) is insurance that protects the lender on conventional loans when the borrower’s down payment is less than 20% (high-ratio loans). The borrower typically pays monthly PMI or an upfront premium. PMI does not protect the borrower — it reduces lender risk and enables lower down payments. 1

MIP (Mortgage Insurance Premium) is the insurance charged on FHA loans — it may include an upfront MIP paid at closing plus an annual/monthly premium. FHA MIP rules differ from PMI and, importantly, for most FHA loans originated on or after June 3, 2013, MIP may remain for the life of the loan unless the borrower refinances or qualifies under narrow exceptions. 2

Legal & historical background — The Homeowners Protection Act (HPA)

Congress passed the Homeowners Protection Act (HPA) in 1998 (Public Law 105-216) to standardize PMI cancellation and eliminate unfair “life-of-loan” PMI in many borrower-paid cases. The law requires disclosure of cancellation rights and sets automatic and borrower-requested termination thresholds (78% automatic termination; 80% borrower request), with exceptions for certain high-risk loans. Use the HPA text and the CFPB/HUD guidance as your legal reference when you contact a servicer. 3

Step-by-step — How to remove PMI from a conventional mortgage

Overview (quick)

1. Confirm whether you have PMI and whether it's borrower-paid or lender-paid (check closing docs or call your servicer).
2. Calculate your current LTV using the original value (purchase price or original appraisal).
3. If your loan balance is ≤80% of original value, file a written PMI cancellation request with your servicer.
4. If your balance is scheduled to reach 78% under your amortization schedule, expect automatic termination if payments are current.
5. Prepare for documentation: proof of on-time payments, evidence of no subordinate liens, and possibly an appraisal or broker price opinion (BPO).
6. If you can’t meet the thresholds but have gained market appreciation, consider ordering a current appraisal to show LTV ≤80% (servicer may accept).

Detailed notes below expand each step with forms, sample wording, and legal checks. 4

Step 1 — Confirm what kind of mortgage insurance you have

Find your closing disclosure, mortgage note, or the PMI disclosure form. If you can’t find documents, call your loan servicer (the company that sends monthly statements). For U.S. Bank customers, U.S. Bank’s mortgage knowledge base explains how to request PMI removal and gives contact info for a specialist. 5

Step 2 — Calculate LTV correctly

Use the original value (the purchase contract price or the original appraisal — whichever is lower) unless you refinanced (then origination appraisal at refinance is the original). LTV = current unpaid principal balance ÷ original value. If that ratio is ≤80%, you are generally eligible to request cancellation (subject to good payment history and no subordinate liens). If your amortization schedule shows your balance is scheduled to hit 78% by a specific month, automatic termination rules apply. 6

Step 3 — Make a formal written request

Even though you can request by phone, put your request in writing and include: loan number, property address, current unpaid principal balance, statement that you request PMI cancellation per the HPA, certification of no subordinate liens, and contact info. Many servicers provide a short PMI cancellation form; U.S. Bank asks customers to contact their mortgage team and will review eligibility. Keep proof of delivery (certified mail or email). 7

Step 4 — Be ready to provide documentation

Common requirements: evidence you are current on payments (12 months of on-time payments may be required), written certification there are no second liens, and a servicer-approved valuation (appraisal or other) showing current market value if you claim market appreciation. Servicers and investor guides (Fannie Mae/Freddie Mac) set evaluation steps servicers must follow. Expect appraisal costs and a short processing window. 8

Step 5 — What to expect after you apply

The servicer will verify payments and may order an appraisal. If approved, the servicer will issue a cancellation notice, stop future PMI charges, and—if applicable—refund any unearned prepaid amounts per the HPA. If denied, ask for the specific reason and the calculation used; you can appeal or supply updated valuation info. 9

FHA MIP: Why it’s different and what you can (and cannot) do

FHA mortgage insurance (MIP) is governed by HUD rules that differ from PMI: for loans with a case number assigned on or after June 3, 2013, the duration of annual MIP depends on down payment amount — many borrowers with less than 10% down pay MIP for the life of the loan. For borrowers who made a ≥10% down payment, MIP may terminate after 11 years. If you have an FHA loan and want to stop paying MIP, the usual routes are (a) refinance into a conventional loan once you have sufficient equity and credit, or (b) if your FHA loan originated before the June 3, 2013 rule, use the legacy cancellation rules that may allow termination at 78%/80% thresholds. Check HUD/FHA guidance for your loan's case number date and exact rules. 10

Practical takeaway: Do not assume FHA MIP will cancel automatically — check your origination date and down payment history; refinancing into a conventional loan with >20% equity is often the fastest way to eliminate MIP. 11

How major banks treat PMI — U.S. Bank (example)

Large servicers and banks generally follow HPA and agency investor rules (Fannie/Freddie). U.S. Bank publishes clear guidance: you may request PMI cancellation once your loan meets 80% LTOV criteria; a specialist will review your account and they provide a contact channel for PMI removal requests. U.S. Bank also lists refinancing as a way to remove PMI or MIP (if applicable). Because each bank’s internal procedures differ slightly (forms, appraisal vendors, turnaround time), always confirm the exact checklist with your servicer. 12

Refinance and other strategies to eliminate mortgage insurance

Refinance to a conventional loan

If your home has appreciated or you’ve paid down principal to give you ≥20% equity (by original value or current value depending on the lender), refinancing from FHA to conventional often eliminates MIP/PMI. Consider closing costs, the interest rate environment, and how long until savings offset refinance costs. Some refinance programs allow no-appraisal options (subject to lender rules), but conventional PMI removal typically requires an appraisal unless the lender uses internal valuation products. 14

Make extra principal payments

Paying additional principal reduces balance and accelerates LTV thresholds. Calculate whether extra payments produce earlier PMI cancellation and faster savings than other options. Many borrowers make principal-only payments or a lump sum from a bonus/inheritance to push LTV under 80%. 15

Home improvements & appraisal to document appreciation

If your market value increased, a documented appraisal may show LTV ≤80% even if your balance is higher relative to original purchase price. Small improvements & good comparables can help the appraiser. Be mindful of appraisal expense vs. monthly PMI saved. 16

Appraisals, timing, costs & servicer valuation rules

Servicers may require an appraisal from an approved vendor to verify market value for cancellation requests. Typical appraisal costs range from approximately $300 to $700 (location & scope dependent). Some servicers accept automated valuation models (AVMs) or broker price opinions in limited circumstances, but a full appraisal is the most reliable evidence. Confirm the exact evidence your lender requires before paying for an appraisal. 17

Don't forget: If you have subordinate liens (HELOC, second mortgage), servicers typically require those liens be paid off or subordinated before cancellation; the HPA requires certification that there are no junior liens. Also, late payments can block cancellation even if you meet LTV thresholds. 18

Real-life numeric example

Scenario: You purchased a home for $350,000 with a 10% down payment (down = $35,000). Loan amount = $315,000. PMI monthly cost ≈ 0.5% annually of loan amount (a typical midpoint). Your target: remove PMI when unpaid principal balance ≤80% of original value = $280,000.

How much principal to pay down?
Required principal reduction = $315,000 − $280,000 = $35,000. That’s the amount you must reduce by scheduled payments or extra principal to reach the 80% threshold based on original value. If you make additional principal payments of $500/month, you will reach the target faster (exact timeline depends on amortization). Alternatively, if market appreciation increases your home's value (for example to $400,000), an appraisal showing a current value of $400,000 would set the new LTV at $315,000 ÷ $400,000 = 78.75% — which could qualify you for automatic termination or immediate cancellation after servicer review. Weigh appraisal cost vs savings: if PMI is $131.25/month (0.5% × $315,000 / 12), annual savings ≈ $1,575; an appraisal at $450 would be recouped quickly. 19

Common pitfalls, exceptions & FAQs

Q: Can lenders refuse to cancel PMI even if I reach 80%?

A: If you meet the HPA criteria—80% borrower request or 78% automatic—servicers must follow the law and agency rules; however, exceptions exist for “high-risk” loans or lender-defined ineligible loans. Also, if you have late payments or secondary liens, the servicer can deny cancellation until those are corrected. If denied, request the denial reason in writing. 20

Q: My mortgage is FHA — can I remove MIP without refinancing?

A: Generally no for many FHA loans originated on/after June 3, 2013, unless you meet the narrow exceptions (e.g., certain down payment thresholds and timing). Most FHA borrowers remove MIP by refinancing into a conventional loan after building sufficient equity. Always verify the case number/loan origination date against HUD guidance. 21

Q: How long does the servicer process take?

A: Processing times vary. After you submit a written request and required docs, expect anywhere from a few weeks to a few months depending on appraisal turnaround, servicer backlog, and whether additional documentation is needed. Keep copies of everything and follow up. (Note: This is servicer-dependent; U.S. Bank and other large servicers provide dedicated PMI review teams.) 22

Q: Is PMI tax deductible?

A: Mortgage insurance deductibility has changed over time and is subject to tax law. As of recent years the specific deduction rules have shifted; consult a tax professional and current IRS guidance for 2025 tax rules. (Do not rely on general internet articles for tax advice without confirmation.) 23

Action checklist & sample PMI cancellation letter

Quick checklist (printable)

• Locate PMI disclosure & closing docs (purchase price, original appraisal, loan number).
• Calculate LTOV (current unpaid principal ÷ original value).
• Confirm payment history (12 months of on-time payments recommended).
• Call servicer to request PMI cancellation form and process — get contact name & reference number.
• If required, order an appraisal only after confirming the servicer will accept it and will reimburse or apply cost.
• Send written PMI cancellation request via certified mail and keep copies.
• Follow up in writing if you are denied and request the exact reason in writing.

Sample PMI cancellation request (editable)

[Your name]
[Your address]
[City, ST ZIP]
[Phone]  [Email]
[Date]

Loan Servicer: [Servicer name]
Loan Number: [XXXXXXXXX]
Property: [Property address]

Re: Request for cancellation of private mortgage insurance under the Homeowners Protection Act

To Whom It May Concern:

I am writing to request cancellation of private mortgage insurance (PMI) on my mortgage, per the Homeowners Protection Act and the PMI disclosure provided at closing. My loan number is [loan number]. According to my records, the unpaid principal balance is $[balance], which is at or below 80% of the original value ($[original value]) of the property.

I certify that:
• My payments are current and I have a satisfactory payment history;
• There are no subordinate liens against the property (no second mortgage or HELOC);
• I request that you evaluate this loan for PMI cancellation and advise me of any documentation required.

Please advise in writing the next steps and any valuation or forms required. I can be reached at [phone] or [email]. Thank you.

Sincerely,
[Your signature]
[Printed name]
        

References & selected sources

1. CFPB — When can I remove private mortgage insurance (PMI)?. (CFPB guidance on 80% request and 78% automatic termination). 24
2. HUD / FHA — Single Family Mortgage Insurance Premiums (MIP) and FHA mortgagee letter on changes effective June 3, 2013. (FHA MIP policy & duration rules). 25
3. Public Law 105-216 — Homeowners Protection Act of 1998 (text on govinfo). (Legal origin of PMI cancellation rules). 26
4. Fannie Mae Servicing Guide — Termination of Conventional Mortgage Insurance. (Servicer obligations for MI termination). 27
5. Freddie Mac Servicing / MI guidelines — cancellation/valuation requirements. 28
6. U.S. Bank Knowledge Base — How to request PMI removal; U.S. Bank customer pages that outline approaches (request, appraisal, refinance). (Servicer example and contact). 29
7. Bankrate — Practical consumer guidance about removing PMI (timing, cost considerations). 30
8. Investopedia — Primer on PMI and removal strategies (rates and effects). 31
9. Fannie Mae SMDU guidance — technical servicer workflows for borrower-initiated MI termination. (Servicer valuation process.) 32