Can I Get an Appraisal to Remove PMI? Equity and Requirements

Yes, you can get an appraisal to remove PMI if you have a conventional loan with borrower-paid mortgage insurance, but the appraisal has to show enough equity to meet your investor’s threshold, and the rules are stricter than most homeowners expect. How much equity you need depends on how old the loan is, and the appraisal itself is ordered by your servicer, not by you.

Which Loans This Actually Works For

Before you spend anything on a valuation, confirm your loan type. Appraisal-based PMI removal applies to conventional mortgages with borrower-paid PMI. Two common situations fall outside the framework entirely.

If you took out an FHA-insured mortgage after June 3, 2013, with less than 10% down, the annual mortgage insurance premium stays for the life of the loan and no appraisal can remove it. Borrowers who put at least 10% down see MIP drop off after 11 years, but that timing is automatic and unrelated to any appraisal.¹ The only way to eliminate FHA mortgage insurance early is to refinance into a conventional loan.

Lender-paid PMI is the other dead end. If your lender covered the mortgage insurance upfront in exchange for a higher interest rate, that arrangement cannot be canceled. It ends only when you refinance, sell, or pay off the mortgage.² Not sure which type you have? Check your closing disclosure or call your servicer.

Two Ways an Appraisal Can Get PMI Off Your Loan

An appraisal can support cancellation on either of two pathways, and they carry different equity requirements.

Based on Original Value

The Homeowners Protection Act gives every conventional borrower the right to request PMI cancellation once the principal balance drops to 80% of the home’s original value.³ Original value is the lower of the purchase price or the appraised value when you bought the home. If you refinanced, it’s the appraised value at the refi closing.⁴

On this path, an appraisal only needs to confirm your home hasn’t dropped below what it was worth at closing. The equity comes from paying down principal, either through the amortization schedule or extra payments.

Based on Current Market Value

This is the pathway most people have in mind when they ask about ordering an appraisal to drop PMI. If your home has appreciated, the higher current value can push your loan-to-value ratio under the threshold years before your payment schedule alone would. Both Fannie Mae and Freddie Mac allow this, but they impose waiting periods and tighter equity requirements.⁵

How Much Equity You Need Based on Loan Age

When you rely on current market value, the equity threshold depends on how long you’ve had the loan. For a primary residence or second home (one unit):

If the loan is two to five years old, your current LTV must be 75% or less, meaning at least 25% equity based on the new appraised value.⁵
If the loan is more than five years old, the threshold drops to 80% LTV or less, so at least 20% equity.⁶
For investment properties and multi-unit residences, LTV must be 70% or less with more than two years of seasoning.⁵

The gap between the two-to-five-year window and the five-year mark trips up a lot of homeowners. Three years into a mortgage with 22% equity on paper, you’ll still be denied because the threshold at that stage is 25%. Run the math before paying for anything.

Other Requirements Beyond the Numbers

Hitting the LTV is necessary but not enough. Federal law layers on conditions your servicer will check.

You need a good payment history. Under the Homeowners Protection Act, that means no payments 30 or more days late in the 12 months before your request, and no payments 60 or more days late in the 12-month period starting 24 months before the request.⁷ In practice, the servicer reviews your last two years for serious delinquencies and your last year for any late payments at all.

You also need to be current when you request cancellation. Even one payment behind and the servicer will reject the request.⁴

Junior liens are a common surprise. You must certify that no subordinate liens exist on the property. A home equity line of credit, a second mortgage, or any similar lien will get your request denied.³ Homeowners who opened a HELOC years ago and forgot about it get caught by this. You’d need to pay it off and close it before reapplying.

How the Appraisal Actually Happens

You don’t pick the appraiser. The valuation runs through your servicer, which selects the method and the professional.

For Fannie Mae-backed loans, servicers often start with an automated valuation model. If the AVM value supports cancellation, no physical appraisal may be necessary. If the AVM comes in too low or isn’t available, you can pay for a broker price opinion or a full appraisal, but the servicer places the order.⁸ When cancellation is based on current market value rather than original value, the valuation must include an interior and exterior inspection.⁵

The appraiser documents the home’s condition, square footage, layout, upgrades, and comparable recent sales. The report goes to the servicer, not to you. If the value supports cancellation and you meet the other requirements, the servicer must stop collecting PMI no more than 30 days after you’ve satisfied all eligibility criteria.⁵

What You’ll Pay

You cover the appraisal cost regardless of the outcome. Fees for a single-family appraisal generally run between $300 and $600, though complex properties, rural locations, or high-cost markets can run higher. A broker price opinion, where allowed, usually costs less than a full appraisal. Confirm the exact fee with your servicer before authorizing anything, because it’s non-refundable if the value comes in short.

Deciding Whether to Order One

Compare the fee to your monthly PMI premium. If you pay $150 a month in PMI and a successful appraisal runs $450, you recover the cost in three months. Online value estimators aren’t precise enough to bet on, but they’ll flag the obvious cases where your equity clearly clears or clearly misses the threshold. If you’re on the edge, the appraisal fee is a real gamble, and looking at recent comparable sales in your neighborhood is the best cheap check you can do first.

The Home Improvement Shortcut

Both Fannie Mae and Freddie Mac waive the two-year minimum seasoning requirement if substantial improvements have increased your home’s value enough to bring the LTV to 80% or below.⁵⁶ That opens the door to requesting cancellation within the first year or two of the mortgage, if you’ve done enough work.

“Substantial” is narrower than most people assume. Kitchen and bathroom renovations, added square footage, and finishing a basement qualify because they meaningfully increase marketability and useful life. Routine maintenance, fresh paint, new carpet, and landscaping do not. The appraiser needs permanent changes that made the home objectively more valuable, not cosmetic refreshes.

Keep permits, contractor invoices, and before-and-after photos. Mention the improvements when you first contact your servicer so the request goes through the improvement pathway rather than the market-appreciation pathway. Good documentation helps the appraiser justify a higher value and helps the servicer confirm the work was done properly.

If the Value Comes Back Too Low

This is where most of the frustration lives. If the appraisal doesn’t support the required LTV, the servicer must send you a written denial within 30 days, including the appraisal results and the reasons.⁹ At least you’ll see the numbers, which is useful for planning your next move.

Options after a denial are limited. The servicer isn’t going to order a second appraisal right away, and you can’t substitute your own independent appraisal. Usually you’ll need to wait, keep paying, and try again once conditions have changed enough to clear the threshold. Some borrowers use the gap to make improvements that push the value up, switching to the improvement-based pathway on the next attempt. The appraisal fee is gone either way.

How to Start the Request

Contact your servicer and request PMI cancellation in writing. The written request is a legal requirement under the Homeowners Protection Act, not a formality.³ Most servicers have a specific form, and the right department is usually listed on your monthly statement or the servicer’s website.

Before you make contact, pull your current loan balance from your latest statement, note the original value of the home, and estimate the current market value from recent comparable sales. Those three numbers let you calculate your approximate LTV and have an informed conversation about which pathway fits. If you’ve made improvements, have the documentation ready to reference on that first call.

Keep copies of everything you send and receive. From request to determination the process usually takes a few weeks when the valuation supports cancellation, though it can stretch longer if an interior appraisal is required or the servicer is slow. The 30-day notification deadlines built into federal law give you something to push back with if things stall.

1
Department of Housing and Urban Development. Mortgage Insurance Premiums
2
National Credit Union Administration. Homeowners Protection Act (PMI Cancellation Act)
3
Office of the Law Revision Counsel. 12 USC 4902 – Termination of Private Mortgage Insurance
4
Consumer Financial Protection Bureau. When Can I Remove Private Mortgage Insurance (PMI) From My Loan
5
Fannie Mae. Termination of Conventional Mortgage Insurance
6
Freddie Mac. Borrower-Requested Cancelation of Borrower-Paid Mortgage Insurance on an HPA Mortgage
7
Office of the Law Revision Counsel. 12 USC 4901 – Definitions
8
Fannie Mae. Borrower-Initiated MI Termination Requests Using SMDU
9
Consumer Financial Protection Bureau. CFPB Consumer Laws and Regulations HPA