PMI (Private Mortgage Insurance) is required of a borrower if they purchase a home with less than 20% down. PMI is protection for the lender against the costs of foreclosure. Mortgage insurance is provided by private mortgage insurance companies, and allows lenders to lend in higher risk situations, such as greater than 80% of the property's market value. Although no one enjoys paying their PMI each month, it allows many people the opportunity to purchase a home without a large cash down payment. The cost of PMI fluctuates with each individual case, and it is relative to your down payment, and the overall loan amount. For example, the cost of PMI is greater for a 5% down payment as opposed to a 10% down payment, and the cost of PMI is more on a $200,000 mortgage than a $100,000 mortgage. The cost is generally in addition to your monthly principal & interest payment. PMI is handled differently by all lenders based on the terms in your agreement with them. The decision to cancel PMI is based upon the lender's guidelines. Generally, lender's will allow a cancellation of PMI if the equity in your home reaches 75-80%. Most  lenders require a time period since the purchase of your home of  1-2 years payments before they will consider terminating your PMI. Others may allow you to remove PMI prior to that time period if significant upgrades/repairs, etc. have been performed on the property. Your first step in removing your PMI is contacting your current lender and getting all the terms in writing. Once you have read and determined the feasability of removing your PMI it is time to get a professional, independent appraisal performed to obtain a professional opinon of market value. The appraisal will be sent directly to the lender and they will make a decision based upon the results of that appraisal.  This is a basic guideline to help provide a better understanding of the basics of PMI.  Final documentation regarding the specifics of your Private Mortgage Insurance must be obtained from your lender. Please feel free to contact Carl Graveline Appraisal Services about any questions you have or to discuss the appraisal process further. The investment in a PMI removal appraisal will generally pay for itself in 1-3 months, and save you money every month thereafter!