PMI (Private Mortgage Insurance) can be removed from a conventional mortgage once your loan-to-value ratio drops to 80% — either through loan paydown or home value appreciation. A current licensed appraisal is typically required to prove increased value. Motto Appraisal Service provides PMI removal appraisals throughout DFW, helping homeowners eliminate monthly insurance premiums that often cost $150-$400 per month.
The 20% Equity Threshold Explained
When you purchase a home with less than 20% down payment, your lender requires Private Mortgage Insurance (PMI) to protect themselves against default risk. PMI is not insurance for you — it protects the lender. You pay it, but you get no direct benefit from it.
Under the federal Homeowners Protection Act (HPA), you have the legal right to request PMI cancellation once your loan balance falls to 80% of the original purchase price or appraised value at origination. But here is the opportunity that many DFW homeowners miss: if your home has appreciated in value since you bought it, you may already have 20% equity based on current market value — even if your loan paydown alone would not get you there for years.
A current appraisal allows you to use current market value rather than your original purchase price as the denominator in the LTV calculation. In a market like DFW, where values in many communities have appreciated 20-50% or more since 2018-2020, this can mean the difference between waiting 5 more years to eliminate PMI and eliminating it next month.
How DFW Appreciation Creates PMI Removal Opportunities
The DFW metroplex has been one of the fastest-appreciating residential markets in the country. Communities along the 114 corridor in northwest Tarrant County — including Roanoke, Trophy Club, and Keller — have seen cumulative appreciation of 40-70% between 2018 and 2024. Southlake, Colleyville, and Grapevine have also appreciated sharply. Even north Fort Worth and the Frisco-McKinney corridor in Collin County have experienced strong gains.
What this means practically: a homeowner who bought a $400,000 home in 2019 with 10% down ($40,000) had a loan of $360,000 and needed 20% equity ($80,000 in equity, or a home value of $450,000) to request PMI removal. If that home is now worth $550,000, the LTV is $360,000 / $550,000 = 65.5% — well below the 80% threshold — and PMI removal is absolutely appropriate.
A current appraisal is how you document that appreciation to your servicer. Zillow's Zestimate or your county's assessed value are not accepted by lenders — they require a licensed appraisal.
Lender Requirements for PMI Removal
The process for requesting PMI removal based on increased value typically involves these lender requirements:
- The loan must be current with no late payments in the prior 12 months
- The loan must meet a minimum seasoning requirement (typically 2 years from origination)
- An appraisal must confirm the current value meets the LTV requirement (typically 80%)
- The appraisal must be ordered through the lender's designated process or an approved appraiser
- Some lenders require a higher equity threshold (75-80% LTV) for investment properties
Contact your loan servicer before ordering an appraisal to confirm their specific requirements. Some servicers order the appraisal themselves through their own AMC, while others accept independent appraisals. We can advise you on this process — call (817) 217-4375.
Monthly Savings from PMI Removal
PMI premiums vary based on credit score, down payment percentage, loan type, and insurer, but most conventional PMI costs between 0.5% and 1.5% of the loan balance annually. For a typical DFW mortgage of $350,000-$500,000, that represents:
- 0.5% rate: $145-$208/month on a $350,000-$500,000 balance
- 1.0% rate: $292-$417/month on a $350,000-$500,000 balance
- 1.5% rate: $438-$625/month on a $350,000-$500,000 balance
At a conservative $200/month in PMI savings, eliminating PMI through an appraisal that costs $450-$550 returns the investment in less than 3 months — and continues saving money every month after that for the life of the loan.
How to Request PMI Cancellation in Texas
- Contact your servicer: Call or write to your mortgage servicer requesting PMI cancellation based on increased home value. Ask specifically about their appraisal requirements.
- Order your appraisal: Complete the order form at tally.so/r/yPM0Od or call (817) 217-4375. We will complete the inspection and deliver a full USPAP-compliant report within 3-5 business days.
- Submit documentation: Provide the appraisal to your servicer along with any other required documentation.
- Servicer review: Your servicer must respond within 30 days. If the appraisal confirms sufficient equity, they are required under the HPA to cancel PMI.
Order a PMI Removal Appraisal
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Frequently Asked Questions
What is PMI and when can I remove it?
Private Mortgage Insurance (PMI) is required by most conventional lenders when you put less than 20% down on a home purchase. Under the Homeowners Protection Act, you have the right to request PMI cancellation when your loan balance reaches 80% of the original appraised value or purchase price (whichever was lower). If appreciation has increased your home's value, you may reach 80% LTV faster using current value rather than original purchase price — but this typically requires a new appraisal.
How much can I save by removing PMI?
PMI typically costs 0.5%-1.5% of the loan balance annually, depending on down payment, credit score, and loan type. On a $350,000 mortgage, that is $1,750-$5,250 per year, or $145-$437 per month. An appraisal that enables PMI removal pays for itself in the first month or two of eliminated PMI payments for most DFW homeowners.
What equity percentage do I need to remove PMI?
For most conventional loans, you need 20% equity (80% LTV) based on a current appraisal to request PMI cancellation based on increased value. Some lenders may require 25% equity for investment properties or for loans less than 2 years old. Contact your servicer first to confirm their specific requirements before ordering an appraisal.
Does DFW appreciation mean I might already have 20% equity?
Quite possibly. DFW home values have appreciated significantly since 2020. If you purchased in 2019-2022 with less than 20% down in appreciation-heavy areas like Keller, Trophy Club, Southlake, or Frisco, you may have already crossed the 80% LTV threshold based on current market value. A current appraisal is the definitive way to find out.
What is the process for requesting PMI removal using an appraisal?
Contact your loan servicer in writing to request PMI cancellation based on increased value. They will provide their specific appraisal requirements (form type, appraiser approval process). Order an appraisal from Motto Appraisal Service meeting those requirements. Submit the completed appraisal to your servicer. If the appraisal confirms 80% or lower LTV, the servicer is required to cancel PMI.
My lender says they only accept appraisals from their approved list. Can you still help?
Some servicers maintain an approved appraiser list or require appraisals through their designated AMC. In that case, we may not be able to perform the lender-ordered appraisal directly. However, we can provide a preliminary opinion of value to help you determine whether requesting PMI removal is worth pursuing before going through your servicer's process. Call (817) 217-4375 to discuss your situation.
Does PMI removal work differently for FHA loans?
Yes. FHA Mortgage Insurance Premium (MIP) works differently than conventional PMI. For FHA loans originated after June 2013 with less than 10% down, MIP is required for the life of the loan — it cannot be removed with an appraisal. To eliminate MIP from an FHA loan, you typically need to refinance into a conventional loan once you have sufficient equity. A refinance appraisal from Motto Appraisal Service can establish whether you have the equity to refinance out of FHA.
How soon after my purchase can I request PMI removal?
Most conventional loan servicers require the loan to be at least 2 years old before you can request cancellation based on improved value. Some allow it after 1 year. After 5 years, you can typically request review with any LTV below 80%. Check your loan documents and call your servicer to confirm the waiting period for your specific loan.