How to Dump Your PMI

Lenders usually have to drop private mortgage insurance when your equity hits 22% of your home's value. But sometimes it's not that clear cut.

I have been waiting for the day when I would have 20% equity in my home and would be able to cancel my private mortgage insurance. Now that day has come (I actually have 22% equity). But when I called Chase (my lender) and was told that I needed to get a Broker Price Opinion, which costs $150, before they would do anything. Can they do that?

Call it a Catch-22%. Lenders are generally required to drop private mortgage insurance when your equity in your home reaches 22% of the property's value. If you ask, they'll sometimes do it once your equity reaches 20%.

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Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.