How to Avoid or Remove PMI (Private Mortgage Insurance)

It depends on current tax law. PMI was tax-deductible through 2021, but the deduction expired and is subject to Congressional renewal each year. Even when deductible, it phases out for higher-income earners (typically above $100,000 AGI). Check with your tax professional or the latest IRS guidance. Note: Mortgage interest is still deductible regardless of PMI status.

The average is 6-11 years if you wait for automatic removal at 78% LTV. However, proactive homeowners who make extra payments or refinance typically eliminate PMI in 3-5 years. With Nevada's strong home appreciation (4-6% annually), combined with regular payments, many Nevada homeowners hit 20% equity in under 5 years. The key is not to just wait passively – request removal as soon as you hit 80% LTV.

No – PMI protects the lender, not you. This is a common misconception. If you default on your mortgage, PMI reimburses your lender for their losses. You still lose your home and damage your credit. If you want protection for yourself, consider mortgage protection insurance or disability insurance, which are entirely separate products that pay your mortgage if you're unable to work.

PMI is for conventional loans and can be removed once you reach 20% equity. FHA MIP is required on all FHA loans and is much harder to remove – if you put down less than 10% on an FHA loan, MIP lasts for the life of the loan (you must refinance into conventional to remove it). This is why many borrowers with improving credit refinance from FHA to conventional: to eliminate that lifetime MIP burden and save thousands annually.

Not always – you need to be proactive. By law, lenders must automatically remove PMI at 78% LTV based on the original amortization schedule. However, they're not required to notify you when you reach 80% LTV (when you can request removal). Many homeowners don't know this and pay PMI for years longer than necessary. Set a calendar reminder to check your LTV annually, or contact us – we can help you calculate when you're eligible and walk you through the removal process.

Yes, but you'll need a new appraisal. If your Nevada home appreciated significantly (common in Las Vegas and Reno markets), you can request PMI removal based on the current value rather than original purchase price. For example: you bought for $350K with 10% down (90% LTV), but after 2 years your home is worth $400K. Your loan balance is now $305K, making your LTV just 76% on the new value – well below 80%. Order an appraisal ($300-600), submit it to your lender with a written PMI cancellation request, and you should qualify for removal even though you've only made 2 years of payments.

It depends on your situation. If putting 20% down drains your savings, you might be better off putting less down, paying PMI temporarily, and keeping cash for emergencies or investments. PMI is typically $100-300/month and removable within a few years. However, if you have comfortable savings after 20% down, avoiding PMI saves money long-term and gets you better loan terms. Middle ground: Put down 10-15%, pay PMI for 2-3 years while home appreciates, then remove it. This strategy lets you buy sooner (not waiting years to save 20%) while minimizing PMI costs.