Updated over 5 years ago on . Most recent reply
Time to remove PMI?
When does it make financial sense to pay down the mortgage on a rental property enough to get PMI removed? I have a conventional 30 year mortgage with PMI on a SFH that I'm currently renting out. I checked recently and I would be able to get my loan balance down to the 78% LTV threshold required to remove PMI if I made a $13K lump sum payment. With PMI removed, my monthly gross would increase by approx $350. What additional factors should I be considering when deciding whether or not PMI removal is the right choice?
Most Popular Reply
If you use ROI as a metric, an additional $350 of cash flow due to removing PMI is a great return. $350 equates to $4200/year that's a 32% return on your cash. In three years all your money is back. Check with your lender the process to end the PMI. The lender most likely require an appraisal. Each lender is different.