Private Mortgage Insurance (PMI) on a conventional loan can be removed once you reach 20% equity in your home based on the original purchase price, or 80% loan-to-value (LTV). Federal law requires automatic cancellation at 22% equity (78% LTV) based on the original amortization schedule. You can request removal at 20% equity by contacting your servicer, and in some cases, a new appraisal showing sufficient appreciation can support early removal before you reach the 20% mark through payments alone.
The Three Ways PMI Gets Removed
First, automatic cancellation: the Homeowners Protection Act requires lenders to cancel PMI automatically when your loan balance is scheduled to reach 78% of the original purchase price, based on your amortization schedule. This happens on a specific date regardless of whether you ask. Second, borrower-requested cancellation: once you have actually paid down to 80% LTV (not just scheduled to reach it), you can request that your servicer cancel PMI. You must have a good payment history and may need to confirm the property value has not declined. Third, appraisal-supported early removal: if home values in your area have appreciated significantly, your home may now be worth enough that your current loan balance is already below 80% of the current value. Most servicers require you to have owned the home for at least 24 months and will require a new appraisal at your expense to support this request.
How Bakersfield Appreciation Affects PMI Removal
Bakersfield has seen meaningful home price appreciation over the past several years. A buyer who purchased in 2022 or 2023 and put 5–10% down may already be at or near 20% equity based on current market values, even if the loan balance has not been paid down significantly. The path to early removal requires a servicer-ordered appraisal confirming the new value. If the appraisal supports it, PMI can be removed years ahead of the scheduled date, saving hundreds of dollars per month.
FHA Mortgage Insurance Is Different
FHA loans use Mortgage Insurance Premium (MIP) rather than PMI, and the removal rules are different. For FHA loans originated after June 2013 with less than 10% down, MIP is required for the life of the loan. It cannot be removed by paying down the balance. The only way to eliminate MIP on a post-2013 FHA loan is to refinance into a conventional loan once you have sufficient equity. For loans with 10% or more down, FHA MIP cancels after 11 years.
How to Make the Request
To request PMI cancellation, contact your mortgage servicer (the company you send payments to) in writing. Request their PMI cancellation requirements, which vary by servicer. Most require a written request, confirmation of good payment history (typically no payments 30 days late in the past 12 months), and documentation that the property value has not declined. If an appraisal is required, the servicer will order it and you will pay the appraisal fee, typically $400–$600. If the appraisal supports removal, PMI cancels from that point forward.
The most underused PMI removal opportunity I see is the appreciation-based removal. Bakersfield buyers who purchased a few years ago and put 5% down are often sitting at well over 20% equity based on current values, but nobody has told them they can request PMI removal. Their servicer is not going to call them and say 'hey, you can stop paying us this extra $150 per month.' You have to ask. Run the math on your current loan balance versus what comparable homes in your neighborhood are selling for. If the numbers suggest you are near or past 80% LTV, make the call.
Have a situation like this?
Call Dan at (661) 342-9381. He will review your specific situation in a free call.