Private Mortgage Insurance (PMI)
Insurance protecting the lender on conventional loans above 80% LTV, paid by the borrower. Homeowners can request cancellation as equity grows — often supported by a new appraisal demonstrating the value side of the ratio.
PMI cancellation is one of the most financially direct reasons a homeowner orders a private appraisal. Under the federal Homeowners Protection Act, borrowers can request cancellation at 80% LTV based on the original value, and servicers commonly entertain requests based on current value after appreciation or improvements — their investor guidelines typically require seasoning and a current appraisal. A few hundred dollars of appraisal can eliminate a recurring monthly premium, which is why "PMI removal" is a standard private-work assignment.
Related Terms
Loan-to-Value Ratio (LTV)
LTVLoan amount divided by the lesser of price or appraised value.
Mortgage
A loan secured by real property, giving the lender a lien and the right to foreclose on default.
Appraisal
The act or process of developing an opinion of value for a property, performed by a licensed or certified appraiser following recognized methods and professional standards.
More in Legal & Regulatory
View allUniform Standards of Professional Appraisal Practice (USPAP)
USPAPThe nationally recognized ethical and performance standards for the appraisal profession, established by The Appraisal Foundation.
FIRREA (Financial Institutions Reform, Recovery, and Enforcement Act)
FIRREAThe 1989 federal law that established the modern appraisal regulatory framework, requiring state licensing of appraisers and USPAP compliance for all federally related real estate transactions..
Dodd-Frank Act (Appraisal Provisions)
The 2010 federal financial reform law that included significant appraisal provisions: appraiser independence requirements, AMC registration, customary and reasonable fee mandates, and prohibition of BPOs for origination..
Appraiser Independence
The legal requirement that appraisers must be free from improper influence, coercion, or pressure from parties with a financial interest in the transaction outcome.