If you make less than a 20 percent down payment on a conventional mortgage loan, you can expect to be charged for PMI. PMI, or private mortgage insurance, is an insurance policy the lender obtains on your home to protect the loan’s value in the event you default on your payments. You can drop PMI from your payments if you meet certain qualifications.

You’ve Paid Down 80 Percent of the Loan

Once you’ve paid down 80 percent of the original mortgage loan, your lender will remove PMI costs from your monthly mortgage payments. If the lender does not restructure your monthly payments, you can notify the lender in writing that PMI must be immediately removed from the loan to ensure that it complies with the law. Forcing you to pay PMI for the life of a mortgage loan is illegal.

Your Home Has Increased in Value

If the value of your home has increased, you might already have 20 percent equity in it--even if you made less than a 20 percent down payment on your mortgage loan. Talk to your lender about getting a new appraisal to assess your home’s value. If a lender-approved appraiser confirms the increase in property value, you can request that your lender remove your PMI payments.

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