Removing PMI: A Guide for Tampa Homeowners

Stop Paying for PMI

If you bought your home in Tampa with less than a 20% down payment, you're likely paying Private Mortgage Insurance (PMI). This extra monthly cost protects the lender, not you. But with the recent surge in Tampa real estate values, you might be sitting on enough equity to eliminate it.

The 80% Rule

Generally, lenders require you to have 20% equity in your home to cancel PMI. This can happen in two ways:

1. Pay Down: You pay down the principal balance of your mortgage to 80% of the original loan value.
2. Appreciation: Your home's value increases so that your current loan balance is 80% or less of the current market value.

Tampa Market Appreciation

Neighborhoods like Seminole Heights, West Tampa, and Carrollwood have seen significant appreciation over the last few years. If you bought your home 2-3 years ago, your property value may have increased enough to qualify for PMI removal without paying down a single extra dollar of principal.

The Appraisal Process for PMI Removal

To remove PMI based on current value, you'll typically need to:

• Contact your mortgage servicer to request PMI removal requirements.
• Order a new appraisal (usually through the lender, but sometimes you can select the appraiser).
• Ensure the appraisal comes in at the target value.

Is It Worth It?

PMI can cost between 0.5% and 1% of your loan amount annually. On a $400,000 loan, that's $165 to $330 per month. Investing $500 in an appraisal to save $3,000+ a year is a financial no-brainer.