Removing PMI

[Shawn Mcenteer]

Does anyone have any helpful tips for removing or reducing PMI on an existing mortgage? The house I currently live in has a monthly mortgage payment of $1950, $300 of which is PMI. My wife and I have lived here for approx 6 months, not much equity in home yet.

[Stephen Doyon]

My wife and I had our PMI removed from the loan on our primary residence in March 2013. We made a large principal payment to get our LTV to just under 80% and asked Wells Fargo to remove the PMI. They wanted us to get an appraisal to ensure the value hadn't dropped and had some other requirements as well. They said we could also make another principal payment to get the LTV below 78%. We just did that instead and saved the headache and expense of everything else they wanted us to do.

After removing the PMI, I figured it was similar to investing the money at an annual 6.7% rate. However, after spending time here on bigger pockets, I wish we had used the money toward other real estate investments instead. I definitely think we could have beat 6.7% via other means.