Removing PMI Before HELOC is Put On Property

[Chris Reichenbach]

I am currently renovating my primary home in North Carolina and intend to get a HELOC on the property after the renovations to keep my initial interest rate. A cash-out refinance does not work in my situation since I would need a 90% LTV for the deal to make sense.

Would I be able to remove my PMI from the mortgage, since the property would have more than 20% equity from the rehab before I get a HELOC on the property?

I appreciate the insight!

[Andrew Postell]

@Chris Reichenbach this would be completely dependent on your loan type based on the amount of time you have been in this property. Meaning, if you had only been in this property for 3 months...this answer would be deferent. But if your current mortgage is an FHA loan...then the answer is no, you cannot remove the PMI no matter how much equity you have in your property. The PMI on your home stays in place based on your initial downpayment...if it was 3.5% then the PMI stays as long as that FHA loan stays in place. However, if your loan is a conventional loan, and your loan is in good standing, then you can reach out to your mortgage servicer (the company that collects your payments) to request the PMI to be removed. As mentioned above, they will say "no" initially, and then you'll have to escalate it, and likely pay for an appraisal to get it removed.

Hope all of that makes sense.  Thanks!