My loan is eligible for PMI removal but does not meet the LTV requirement based on original property value. If the property value has increased, can I have it re-appraised and request PMI removal based on the new value?
Depending on the owner of your mortgage loan and applicable state laws, you may be eligible to request PMI cancellation based on the current value of your property. If your mortgage loan qualifies for cancellation based on the current value, the following additional requirements must be met:
If the loan is between two and five years old, the loan-to-value (LTV) ratio must be 75% or less.
If the loan is greater than five years old, the LTV must be 80% or less.
If the loan closed less than two years ago, the LTV must be 80% or less and evidence of substantial improvements* made since the origination date must be provided.
If the property is secured by a 1–4 unit investment property or a 2-4 unit principal residence, the LTV ratio must be 70% or less and the loan must be greater than two years old.
In all cases the LTV must be verified by a property valuation, which may be based on an inspection of both the interior and exterior of the property. Customer Care will provide you with the estimated cost of the valuation, collect the amount from you, and order the valuation.
* Substantial improvements increase the property value and typically include renovations that substantially improve marketability and extend the useful life of the property. Generally, substantial improvements add livable square footage such as a bedroom or bathroom. Improvements that upgrade existing functionality but do not add livable square footage may not be considered substantial improvements—for example, new countertops, tile or carpet, adding solar panels, adding a pool, etc. In addition, the improvements must conform to local zoning and building codes, and the valuation must state the specific nature, extent and cost of the improvements and their effect on current market value.
