Read this before you order anything
PMI removal is the assignment where homeowners most often spend money that never had a chance of working.
Here is the part most pages leave out.
The Homeowners Protection Act gives you two rights. Both are calculated on the property’s original value — what it was worth when you bought it:
- Automatic termination once your balance reaches 78% of original value, based on the amortisation schedule.
- Cancellation on request once you reach 80% of original value.
Neither of those needs an appraisal. They are arithmetic on your loan.
Cancelling because the property has appreciated is a completely different process. It is not an HPA right.
It is governed by your servicer’s policy and by the rules of whoever owns the loan. They set the terms — including whether an appraisal is accepted at all.
The three questions to ask your servicer
Before you commission a report from us or anyone else, get these answered in writing:
- Do you allow cancellation based on current value? Some do not.
- What LTV and what seasoning period do you require? Typically, for conventional loans following Fannie Mae’s rules: at least two years old and 75% LTV, or at least five years old and 80% LTV. Under two years usually requires substantial documented improvements.
- Will you accept an appraisal I commission, or must you order it? This is the one that catches people. A number of servicers will only accept a valuation they ordered from their own panel.
If that last answer is “we order it”, an owner-commissioned appraisal is money spent for nothing. Better to know before you spend it.
Where the answers come back favourable, an appraisal is a straightforward and usually profitable step. Where they do not, we would rather say so on the phone than take the engagement.
Do the arithmetic first
PMI on a typical Northern or Central New Jersey purchase tends to run between $80 and $250 a month, depending on loan size, original LTV and credit profile.
At $150 a month against a $500 appraisal, you break even in a little over three months. Everything after that is yours.
That is a good trade — if the value clears the threshold.
Which is the whole reason for the screening step. If your equity looks marginal against the servicer’s required LTV, the honest recommendation is usually to wait.
An appraisal that lands two percentage points short is a real cost with no benefit. The value will not be moved to accommodate the threshold.
Why this comes up so much in New Jersey right now
A great many homes here were bought with less than 20% down between 2018 and 2021.
Appreciation carried them past the equity threshold years ahead of where the amortisation schedule would have. Owners who have not looked at the statement in a while are frequently still paying.
Worth a check anywhere in the service area, and particularly in the counties that saw the steepest run-up — Hunterdon, Somerset, Morris, Union.
If you have an FHA loan
Generally this does not work. FHA mortgage insurance is a different product from private mortgage insurance.
For loans endorsed on or after June 3, 2013 with a high original loan-to-value, the premium runs for the life of the loan. No appraisal will remove it.
The usual route out is a refinance into a conventional loan — a conversation for a lender, not an appraiser.
What you receive
A written appraisal with a current effective date, in whatever form your servicer has specified, carrying a signed USPAP certification.
Delivered to you and, on your instruction, directly to the servicer. Fee quoted in writing before work starts.
New Jersey specifics
- Northern and Central New Jersey saw enough appreciation between 2020 and 2023 that many owners crossed the equity threshold years before their amortisation schedule would have got them there.
- The counties where this comes up most are the ones with the steepest run-up — Hunterdon, Somerset, Morris and Union — but it is worth checking anywhere the purchase was made with less than 20% down.
What you receive
- Appraisal report with a current effective date
- Market value conclusion in the form your servicer accepts, where they have specified one
- Signed USPAP certification
- Digital delivery to you and, on instruction, direct to the servicer
What we need from you
- Your servicer's written PMI cancellation requirements
- Your loan origination date and original purchase price or original appraised value
- Current principal balance
- Interior access