Still paying PMI on your Hilliard home and wondering how to drop it? You are not alone. Many Franklin County homeowners carry mortgage insurance longer than they need to. In this guide, you will learn what PMI is, how it differs from FHA MIP, and practical ways to remove it so you can lower your monthly payment. Let’s dive in.
What is PMI?
Private mortgage insurance, or PMI, is insurance on many conventional loans when your down payment is below about 20 percent. You pay the premium, but it protects the lender if you default. PMI adds to your monthly housing cost, and it does not reduce your loan balance or interest rate.
The good news is that PMI is not forever on most conventional loans. Once you reach specific equity levels, you can ask to remove it or your servicer must remove it automatically.
PMI vs. FHA, VA, and USDA
Not all loans handle mortgage insurance the same way.
- Conventional loans use PMI and follow federal rules for cancellation under the Homeowners Protection Act. You can request cancellation at 80 percent loan-to-value and it ends automatically at 78 percent if you are current.
- FHA loans charge mortgage insurance premiums (MIP). For many recent FHA loans with less than 10 percent down, MIP is required for the life of the loan. If you put at least 10 percent down on certain FHA loans, MIP may last 11 years. HPA rules do not apply to FHA, so removing MIP usually means refinancing into a conventional loan when you qualify.
- VA loans typically do not have monthly PMI. Instead, VA may charge a one-time funding fee, with some exemptions.
- USDA loans use guarantee fees, both upfront and annual. These behave differently than PMI and usually cannot be removed without refinancing or paying off the loan.
Does your Hilliard loan have PMI?
If you are not sure, check your closing documents and monthly mortgage statement for a line labeled “PMI,” “MI,” or “MIP.” Your loan type should be listed as Conventional, FHA, VA, or USDA. You can also contact your loan servicer in writing to confirm whether PMI or MIP applies and to request their cancellation requirements.
Knowing your loan type is step one. Conventional loans follow PMI cancellation rules. FHA loans follow MIP rules. VA and USDA are different programs with different fee structures.
How PMI removal works
Automatic termination at 78 percent
Under federal law, your servicer must remove PMI when your principal balance reaches 78 percent of the original principal balance, based on your original amortization schedule, if you are current on payments. You do not need to apply, but it is smart to check your statement and confirm the date.
Request cancellation at 80 percent
You can request PMI cancellation at 80 percent loan-to-value based on your original home value. Servicers typically require that you are current on payments, have a good payment history, and have no subordinate liens. They may also confirm that your home’s value has not declined and that there is no significant property damage.
Submit your request in writing and ask your servicer for their exact checklist. Keep copies of everything and track your timelines.
Use an appraisal to remove PMI sooner
If your Hilliard home has appreciated, you may be able to remove PMI earlier with a current appraisal that shows your loan is at or below 80 percent of today’s market value. The appraisal cost is paid by you. Many servicers accept a full appraisal and may use an automated valuation in some cases, but requirements vary.
If you pursue this option, work with a local real estate professional to review recent Franklin County comparable sales. Strong comps can help set realistic expectations for the appraised value.
Refinance to drop PMI or FHA MIP
If you have an FHA loan with MIP or a conventional loan where your servicer will not approve cancellation, a refinance into a new conventional loan can eliminate mortgage insurance if your new loan is at or below 80 percent loan-to-value. Weigh the closing costs, interest rate, credit score, and how long you plan to stay in the home. Aim for a break-even point that makes sense for your plans.
Pay down principal faster
A lump-sum principal payment or consistent extra payments can help you reach the 80 percent mark sooner. Ask your servicer how to apply extra funds directly to principal and confirm how they count toward PMI cancellation.
Step-by-step checklist for Hilliard homeowners
- Confirm your loan type. Review your closing documents and monthly statement, or ask your servicer in writing.
- Calculate your LTV. Use your current principal balance and either the original purchase price or today’s estimated value, depending on your strategy.
- Request your servicer’s PMI rules. Ask for their cancellation requirements in writing, including payment history standards and appraisal options.
- At or below 80 percent by original value? Submit a written cancellation request and any required documentation.
- Above 80 percent but your value is higher now? Consider ordering an appraisal and provide it to your servicer.
- FHA loan with MIP? Plan to refinance into a conventional loan when your equity and qualifications align.
- Track every step. Keep copies, note dates, and ask for written confirmation when PMI is removed.
Timelines, costs, and pitfalls
- Timelines: Appraisals often take 1 to 3 weeks. Servicers may take several more weeks to review and respond. Refinances commonly take 30 to 60 days.
- Costs: Budget several hundred dollars for an appraisal. Refinances include closing costs. Check your loan for any prepayment terms.
- Pitfalls: Do not assume FHA MIP can be cancelled under conventional PMI rules. Watch for subordinate liens that can block cancellation. Avoid relying only on an online estimate if your servicer requires a full appraisal. Always get cancellation confirmation in writing.
Local tips for Hilliard and Franklin County
- Leverage appreciation: The Columbus metro has seen periods of strong demand. If your Hilliard neighborhood has appreciated, that can push your LTV lower faster than payments alone.
- Know appraisal norms: Turn times and fees in Franklin County are typical of mid-size Midwestern metros, but they vary. Ask about price and timing before you order.
- Check your servicer’s process: Regional banks and credit unions common in Central Ohio may handle PMI requests a bit differently. Verify whether your loan is serviced in-house or was sold.
- Use local comps: A local agent can pull recent comparable sales that reflect your property type and location. That insight helps you decide if an appraisal-based removal is worth the cost.
When to ask for help
You can do much of the groundwork yourself, but you do not have to navigate it alone. A quick equity review, a look at recent Hilliard comps, and a conversation about refinancing versus cancellation can save time and money. If you want an estimate of your current value and a plan tailored to your loan and goals, we are here to help.
Ready to lower your monthly payment and keep more in your pocket? Connect with The Oracle Group for a local equity check and a clear path to removing PMI.
FAQs
How do I tell if my loan has PMI or FHA MIP?
- Check your closing documents and monthly statement for “PMI,” “MI,” or “MIP,” and confirm the loan type with your servicer in writing.
Can I cancel PMI if my Hilliard home value went up?
- Yes. If a current appraisal shows your loan is at or below 80 percent of today’s value, many servicers allow cancellation, subject to their rules.
What payment history do I need to remove PMI?
- You generally must be current on payments with a strong recent payment history. Ask your servicer for their specific standards in writing.
How long will my servicer take to respond to a cancellation request?
- Expect several weeks, especially if an appraisal is involved. Track your request and follow up if deadlines pass.
Will extra principal payments automatically remove PMI?
- Extra payments help you reach the equity threshold sooner, but you still need to request cancellation or wait for automatic termination when eligible.
Can I remove FHA MIP without refinancing?
- Typically no. FHA MIP is not covered by PMI cancellation rules. Most borrowers remove MIP by refinancing into a conventional loan when they qualify.
Are there Ohio-specific PMI rules I should know?
- Federal HPA rules govern PMI for most conventional loans. Ohio does not add separate cancellation rights that replace those federal protections.
Is PMI tax-deductible for Ohio homeowners?
- Tax treatment can change. Ask a qualified tax professional whether mortgage insurance is deductible for your current tax year.
