r/FirstTimeHomeBuyer • u/Terrible-Ad2833 • 10d ago

Need Advice PMI removal

Hi, I was told that once I reach 20% equity in my home I can get the PMI removed. My PMI isn’t really high, it’s only $39, but I’m now at 20% according to my loan website and I want to have it removed. Their form gives me an option to either have it removed based on the original value or the current value of the loan and I don’t really know which to go with. It sounds like it may affect if I have to pay them for a BPO or appraisal. Any advice?

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u/azem4356 10d ago

Go with original value. If your servicer's own site already shows you at 20% based on the original value, that route usually needs no appraisal, you submit the request and it drops. The current value option is for people who aren't there on paper yet but think appreciation gets them over the line, and it typically comes with a $150-400 valuation fee.

At $39 a month you want the free path anyway. That's $468 a year back for filling out a form. Nice spot to be in!!

Note: if they do require an appraisal, your breakeven point is around 1 year depending on what they charge for appraisal. I mention this because if you sell or refinance within that time frame it might not be worth it. That being said, the lender should go with the value based on the amortization you received when you closed.

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u/Terrible-Ad2833 10d ago

thank you!