To PMI, or not to PMI, that is the question.

[Jeff Arndt]

Hello all!  I feel like I'm making a mountain out of a mole hill on this one and could use some guidance.  In either case, it makes a pretty nifty high school math problem.

I have a mortgage on a property with a PMI payment of $55.40/mo. I have the option to order an appraisal for $480 to hopefully get it removed. The question is should I order the appraisal?

Using an amortization schedule that I created, I calculated that in 27 months the PMI payment will automatically go away. I also calculated that if PMI is removed, it will take me 8 payments to recapture my $480. From this point forward will I begin to profit - but only up until payment 27 - of when it would have automatically gone away without action. If I order the appraisal now, I'll be set to make an extra $890 2 years and 3 months from now.

What would you do?  Would you spend $480 dollars today, get your money back in 8 months, and then earn $890 a little over 2 years from now?

(Note:  I have neglected the time value of money for my analysis so far)