"But when I called my lender, they said I'd need at least two years of payments plus a new appraisal showing 25% equity—higher than the usual 20%."
Interesting...my lender was pretty straightforward about the standard 20% equity rule, no mention of a two-year minimum either. Maybe yours has stricter internal policies? Honestly though, even with the hassle of an appraisal, ditching PMI saved me enough monthly to justify the headache. Might be worth shopping around or refinancing if your lender's making it overly complicated.
"Maybe yours has stricter internal policies?"
Yeah, I was thinking the same thing. From what I've heard, lenders can definitely have their own internal guidelines beyond the standard rules. When I bought my place last year, my lender explained that while 20% equity is the general rule for dropping PMI, some banks might be more cautious depending on market conditions or even your loan type.
Honestly, though, if you're close to that 25% mark anyway, it might still be worth going through the appraisal hassle. A friend of mine recently refinanced and managed to drop PMI entirely—she said the savings each month were pretty noticeable. But if your lender's making things overly complicated, checking out other options could make sense too. Good luck either way...PMI is definitely one expense I'll be glad to ditch when I get there!
"Honestly, though, if you're close to that 25% mark anyway, it might still be worth going through the appraisal hassle."
Yeah, totally agree here. Just a quick heads-up—sometimes lenders have their own quirky little hoops to jump through even when you hit that magic equity number. Had a client recently who thought they were golden at 22%, but their lender required a full appraisal and extra paperwork. Still ended up worth it, though... PMI savings can really add up over time. Just be ready for a bit of back-and-forth before you celebrate, lol.
Good point about lender quirks—I've seen similar situations. Did your client end up getting a decent appraisal value? Sometimes that's the real wildcard...but yeah, ditching PMI usually pays off nicely in the long run.
"Sometimes that's the real wildcard...but yeah, ditching PMI usually pays off nicely in the long run."
True enough, but I'd argue it really depends on your timeline and market conditions. I've seen cases where homeowners rushed to drop PMI, paid for a new appraisal, and ended up disappointed because values hadn't risen as expected. If you're planning to sell or refinance anyway within a couple of years, sometimes holding onto PMI temporarily can make more sense financially. Curious if others have had similar experiences or if I'm just being overly cautious here...
