Want to Save Thousands? Stop Paying PMI Using This Real Estate Hack

If you bought your home with less than 20% down, chances are you’re paying Private Mortgage Insurance (PMI) every month—and it's quietly draining your wallet. But what if we told you there’s a way to remove PMI faster than you think, possibly saving you thousands of dollars each year?

Here’s the secret lenders don’t want you to know:

What is PMI—and Why Are You Paying It?

PMI is a fee you pay to protect the lender, not you. If your down payment was under 20%, lenders consider your loan higher risk and tack on this extra monthly cost.

While it’s great for getting you into a home sooner, PMI can cost hundreds per month—money that could be going toward your principal or savings instead.

The 5 Sneaky Ways to Ditch PMI Sooner

1. Reaching 20% Equity (The Old-School Way)
Once your loan balance drops to 80% of your home’s original value, you can request PMI removal in writing. Lenders won’t remove it automatically until you hit 78%.

Pro tip: Keep track of your principal payments. You might be closer than you think!

2. Home Appreciation Hack (No Renovation Needed!)
Did home values spike in your area? If so, your home may be worth far more than when you bought it. If you now have 20% equity based on current value, get a new appraisal and ask your lender to cancel PMI.

Warning: You may need to pay for the appraisal—usually $600–$800—but the savings often outweigh the cost in just a few months.

3. Refinance and Wipe It Out
Once interest rates have dropped than when you purchased your home, a refinance could help you kill PMI and lock in a better rate. Just make sure your new loan amount is 80% or less of your current appraised value.

Refi = Double win: lower rate + no PMI.

4. Remodel Strategically
Upgrading kitchens, bathrooms, or even adding square footage can boost home value fast. After improvements, get a new appraisal and request PMI removal.

Just make sure the math adds up—you don’t want to over-improve and miss the equity target.

5. Hit the Magic Mark with Extra Payments
Send in a little extra each month toward your principal, or make one lump-sum payment if you can. Every dollar gets you closer to 20% equity.

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Disclaimer:
The information provided in this blog is for general informational purposes only and should not be construed as legal, financial, or tax advice. Always consult with a licensed mortgage professional, financial advisor, or attorney regarding your specific situation before making any decisions about mortgage insurance or refinancing. While efforts are made to ensure accuracy, no guarantees are made regarding the completeness or reliability of the information. Joshy Abraham is a licensed real estate agent in the state of Oregon with MORE Realty and does not provide legal or financial services.