Your lender is required to cancel PMI at a 78% LTV ratio. Unless you tell the bank to consider market appreciation and home improvements you’ve made, it will stick with its original PMI cancellation schedule created when you got your loan. It is up to you to keep track of local real estate appreciation and make home improvements to increase home value. Once your confident that your LTV ratio has reached 78%, you can contact your lender to request cancellation of PMI.
The mortgage lender should have provided information at the loan closing providing contact information and disclosing the right to PMI cancellation. Call your lender and find out about rules, costs, timing and potential penalties charged for cancelling PMI. Know all the rules before you make a formal request to waive PMI. The lender most often has the right to select the real estate appraiser from an approved list, so don’t get your own appraisal unless the lender will accept the report. Full appraisals can be expensive sometimes exceeding $500. Each lender’s process is a little different, so get the details and requirements to save time and headaches.