NuKey Realty- September 8, 2025
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How to Get Rid of PMI (Private Mortgage Insurance) Faster
For many homeowners, private mortgage insurance—better known as PMI—feels like an extra cost with little benefit. It’s usually required when you buy a home with less than twenty percent down, and it protects the lender in case of default. For you, it simply shows up as another line on the mortgage bill.
While PMI may be unavoidable at the start, the good news is that it doesn’t last forever. With the help of an experienced real estate company like NuKey Realty and the right strategy, you can shorten the timeline, lower your monthly payment, and save thousands over the life of your loan.
What Exactly Is Private Mortgage Insurance?
Private mortgage insurance is a monthly fee that homeowners pay in addition to their mortgage principal, interest, taxes, and insurance (often referred to as PITI). PMI is common with conventional home loans, where the buyer has a down payment of less than twenty percent.
The cost depends on several factors—loan amount, credit score, and loan type—but it usually ranges between 0.3% and 1.5% of the original loan annually. That can easily add up to $100 to $300 a month or more.
Over the course of a year, PMI might cost you more than $2,000. Over several years, that number can climb into the tens of thousands. That’s why homeowners are eager to cancel it as soon as they can
When Can You Cancel PMI?
Under federal law, lenders must automatically drop PMI once your loan balance reaches 78% of the home’s original purchase price. However, you don’t have to wait until that happens. You can usually request PMI cancellation once your loan-to-value (LTV) ratio reaches 80%.
Example: If you bought a $300,000 home with a $270,000 mortgage (10% down), you’ll need to reduce your loan balance to $240,000 before you can request PMI removal.
That equity milestone can be reached faster than you think—especially if your home’s value rises or you make extra payments.
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Four Ways to Get Rid of PMI Faster
Here are the most effective strategies to remove private mortgage insurance ahead of schedule. Each requires planning and discipline, but none of them are difficult.
1. Pay Down the Mortgage Principal
The simplest method is to make extra payments toward your principal. Rounding up your monthly payment by even $100 or applying a tax refund directly to the loan can chip away at your balance.
Over time, these small moves add up. If you can pay an extra mortgage payment each year, you could shave years off your loan and reach the 80% LTV mark much sooner.
2. Refinance Your Loan
Refinancing can be a powerful tool for eliminating PMI—especially if your home has increased in value since you bought it. A new appraisal during the refinance process may show that you now have at least 20% equity.
This option works best when interest rates are steady or lower than your current rate. For Spokane homeowners, where property values have been rising, refinancing may unlock both lower payments and freedom from PMI. You should have this conversation with your mortgage lender.
3. Request PMI Removal at 80% LTV
Don’t assume the lender will notify you when you hit the threshold. Once you reach 80% LTV, you can formally request cancellation. Most lenders will ask for proof, such as an appraisal or updated property valuation, to confirm that your home is worth enough to justify removal.
4. Increase Your Home’s Value
Another way to build equity is by raising the value of your home. Renovations such as updating the kitchen, replacing old flooring, or adding energy-efficient features can all help. Even routine maintenance—like replacing a roof or upgrading systems—can make your home more attractive to appraisers. Curb appeal upgrades influence home value as well.
The Savings Can Be Significant
If your PMI costs $200 a month, eliminating it just one year earlier saves you $2,400. Freeing yourself from PMI two or three years early could mean $5,000 to $7,000 in savings. That’s money that could go toward retirement savings, home upgrades, or other financial goals.
Common Questions About PMI Removal
Do I have to refinance to cancel PMI?
Not always. Refinancing is one option, but if you’ve reached 80% LTV through regular payments or rising property values, you can request cancellation without refinancing.
What documents do I need to request removal?
Most lenders will want a written request along with proof that your loan is current. They may also ask for a new appraisal or a broker’s price opinion to confirm the property’s value.
What if my credit score has improved?
Improved credit can help if you decide to refinance. A stronger credit profile may qualify you for a better rate, which makes refinancing more attractive.
Can I avoid PMI when buying a home?
Yes. The most common way is to make a down payment of twenty percent or more. Some buyers explore lender-paid PMI programs, but those often come with higher interest rates, so it’s worth weighing the long-term costs.
Need help finding a home to to buy in Spokane? Contact NuKey Realty today!
Spokane Market Considerations
Spokane’s housing market has seen steady growth for several years. For homeowners, that means equity may be building faster than expected. If you bought your home a few years ago with a smaller down payment, you might already be closer to the 80% LTV mark than you think.
Local real estate professionals can provide market insights, connect you with trusted appraisers, and help determine whether refinancing makes sense.
Private mortgage insurance doesn’t have to be a long-term expense. By paying down your loan strategically, considering a refinance, or keeping up with your home’s value, you can cut years off your PMI obligation.
At NuKey Realty in Spokane, we work with homeowners every day to understand their mortgage options and build equity faster. Whether you’re hoping to cancel PMI early or simply want to know where you stand, we can help you chart the best path forward.
Ready to explore your options? Contact NuKey Realty today and take the first step toward reducing your monthly housing costs.
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