Is a PMI-removal appraisal worth paying for now?
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I’m trying to decide whether requesting borrower-initiated PMI cancellation makes financial sense, rather than simply waiting for the lender’s automatic termination date.
The numbers I’m working with are:
- Current PMI: $___ per month
- Estimated appraisal or valuation fee: $___
- Current principal balance: $___
- Original property value used for the loan: $___
- Estimated months until automatic PMI termination: ___
At the current payment, waiting would cost roughly:
`monthly PMI × months remaining`
So the basic break-even point seems to be:
`appraisal and other required costs ÷ monthly PMI`
The uncertainty is whether the valuation will actually establish the lender’s required loan-to-value ratio. There could also be repair costs, a second valuation, or other lender requirements if the property condition or valuation doesn’t support cancellation.
For those who’ve gone through this, did you compare the appraisal cost with the remaining PMI first? Did your lender provide a clear target balance or LTV threshold and explain whether an appraisal was required, or was an automated valuation acceptable? I’m especially interested in cases where the savings were only modest, since paying for an appraisal could erase most of the benefit.
1 reply
It usually comes down to the math. If the appraisal cost is lower than the PMI you would save before automatic termination, it may be worth considering.
Before ordering an appraisal, you should confirm your lender’s required LTV threshold and whether they accept an appraisal or another valuation method. It is also important to factor in possible repair requirements or additional fees.
A quick break-even calculation can help determine if the upfront cost makes financial sense.
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