Private Mortgage Insurance (PMI) Cancellation Guidelines

Private mortgage insurance, or PMI

When you make a down payment of less than 20 percent, private mortgage insurance, or PMI, is required in the event you end up in foreclosure. PMI also is required if you refinance a mortgage with less than 20 percent equity.

Login New Orleans mortgage

The following automatic loan termination guidelines apply to conventional loans only and to single-family principal/second home loans.

private mortgage insurance

Mortgages Closed On or After 7/29/99
Automatic termination: The earlier of (1) the date the mortgage balance is first scheduled to reach 78% of the original value; or (2) the mid-point of the amortization period.
Effective date: 7/29/1999

Mortgages Closed Before 7/29/99
Automatic termination: Mid-point of the amortization period
Effective date: 1/02/2001.

Borrower Initiated Cancellation Guidelines for Single Family Principal / Second Home

Cancellation Evaluation Based on Original Value
Mortgages Closed On or After 7/29/99
Cancellation point:
Loan-to-value ratio must be 80% or less
Effective: 7/29/99.

Cancellation Evaluation Based on Original Value
Mortgages Closed Before 7/29/99

Cancellation point: Loan-to-value ratio must be 80% or less
Effective: 5/07/99.

Mortgage insurance cancellation must be approved at the above cancellation points provided the following criteria are satisfied:

  • Payment Status: No 30 day late payments in the 12 months prior to the cancellation date/point, and no 60 day late payments in the 24 months prior to cancellation date and cancellation point.
  • Evidence of Value: Appraisal to support loan-to-value requirements at borrower's expense.

No minimum length of time from date loan was closed.

Cancellation Evaluation Based on Current Value
Mortgages Closed Before, On or After 7/29/99
Cancellation Date: Loan-to-Value ratio must be 80% or less, if 5 years or more have elapsed since loan origination; or Loan-to-Value ratio must be 75% or less if 2 or more years, but less than 5 years, have elapsed since origination.

Minimum seasoning requirements: 2 years for 75% LTV cancellation, 5 years for 80% LTV cancellation.

Effective date: 5/7/99 or 7/29/99 Mortgage insurance cancellation must be approved at the above cancellation points provided the following criteria are satisfied:

  • Payment Status: No 30 day late payments in the 12 months prior to the cancellation date/point, and no 60 day late payments in the 24 months prior to cancellation date and cancellation point.
  • Current Appraisal (at borrower expense)
  • Minimum seasoning requirement does not apply if the increase in value is due to property improvements made after loan origination

Please contact Standard Mortgage Corporation for the guidelines that affect your specific loan. The above guidelines do not apply to investment property and 2-4 family properties.

Standard Mortgage Corporation provides this summary as a service to our customers. It should not be considered as a legal opinion or definitive of all aspects of HPA or Fannie Mae's and Freddie Mac's mortgage insurance cancellation guidelines. Source: GE Capital Mortgage Insurance.