Mortgage Insurance Cancellation Request Letter

If youve recently paid off a substantial part of your mortgage or your loan-to-value ratio (LTV) has dropped below the threshold required by your lender, you may be eligible to cancel private mortgage insurance (PMI). Writing a clear, professional request letter is the most reliable way to initiate the cancellation process.

When Can You Cancel PMI?

• After reaching 20% equity in the home (LTV80%). Most lenders require a written request.
• When the mortgage reaches the midpoint of its amortization schedule, even if you havent hit 20% equity (required by the Homeowners Protection Act).
• If a new appraisal shows a higher home value, reducing the LTV.
• When you refinance into a loan with a lower LTV.

Key Elements of a Cancellation Request Letter

A wellstructured letter should include:

• Borrowers information: Full name, current address, phone number, and account number.
• Lenders details: Name of the loan servicing department and mailing address.
• Clear purpose statement: I am requesting cancellation of my private mortgage insurance.
• Reason for request: Reference the equity percentage, recent appraisal, or payment milestones.
• Supporting documentation: Attach a recent mortgage statement, amortization schedule, or appraisal report.
• Signature and date.

Sample Cancellation Request Letter

Tips for a Faster Response

• Verify the exact LTV: Use the latest statement and an uptodate appraisal.
• Doublecheck the lenders requirements: Some lenders require a minimum number of ontime payments before considering cancellation.
• Keep copies of everything: Save a copy of the letter and all attachments for your records.
• Follow up: If you do not receive a response within 1530 days, call the mortgage department and reference your request.
• Consider electronic submission: Many lenders now accept secure messages through their online portal, which can speed up processing.

Common Reasons for Denial

If a lender denies your request, they typically cite one of the following:

• Insufficient equity (LTV still above 80%).
• Recent late payment history.
• Loan type restrictions (e.g., FHA loans have different rules).
• Missing or outdated appraisal documentation.

Should you receive a denial, request a written explanation and consider addressing the specific issue before resubmitting.

What Happens After Cancellation?

Once PMI is removed, you should notice a reduction in your monthly mortgage payment equal to the insurance premium previously charged. Review your next statement to confirm the adjustment. If the new amount seems incorrect, contact the servicer immediately and have your cancellation confirmation letter handy.

Additional Resources

• Consumer Financial Protection Bureau PMI Overview
• HUD Homeowner Insurance Guidance
• Nolo Sample Letter Templates