Do I have to wait 2 years to drop PMI payments?

Question

Let’s say I own and live in a home now, but wish to buy a new home with no contingencies related to having to sell my existing home, so I buy a new $300,000 house with 5% down on June 1, 2018.  The conventional mortgage loan for the new house is for $285,000.  Then in August 2018 I sell my “old” house and receive $240,000 for it, all of which I apply to the new loan, leaving a new loan balance of  $45,000 minus whatever additional principal I have paid in my monthly payment.  Now I have LTV of approximately 15%, much less than the 78-80% often required to drop PMI.  Can the lender or PMI company also demand that I pay PMI premiums for 2 years before dropping the PMI payment?  Thanks!

Answer 1

You can request to drop private mortgage insurance premium once your loan to value hits 78%. Either by appreciation where a new home appraisal may be required or paying down the mortgage loan balance.