By law, your lender must tell you at closing how many years and months it will take you to pay down your loan sufficiently to cancel mortgage insurance.

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If you bought a house with a down payment of less than 20 percent, your lender required you to buy mortgage insurance. The same goes if you refinanced with less than 20 percent equity.

Private mortgage insurance is expensive, and you can remove it after you have met some conditions.

To remove private mortgage insurance, or PMI, you must have at least 20 percent equity in the home.

Canceling PMI rules

According to the Consumer Financial Protection Bureau, you have to meet certain requirements to remove the insurance:

• You must request the insurance cancellation in writing.

• You have to be current on your payments and have a good payment history.

• You might have to prove that you don’t have any other liens on the home (for example, a home-equity loan or home-equity line of credit).

• You might have to get an appraisal to demonstrate that your loan balance isn’t more than 80 percent of the home’s current value.

You may ask the lender to cancel the insurance when you have paid down the mortgage balance to 80 percent of the home’s original appraised value.

When the balance drops to 78 percent, the mortgage servicer is required to eliminate the insurance.

Although you can cancel private mortgage insurance, you cannot cancel recent Federal Housing Administration insurance.

Mortgage insurance reimburses the lender if you default on your home loan. You, the borrower, pay the premiums.

When sold by a company, it’s known as private mortgage insurance. The Federal Housing Administration, a government agency, sells mortgage insurance, too.

Here are steps you can take to cancel mortgage insurance sooner or strengthen your negotiating position:

• Get a new appraisal

Some lenders will consider a new appraisal instead of the original sales price or appraised value when deciding whether you meet the 20 percent equity threshold. An appraisal generally costs $300 to $500.

• Prepay on your loan

Even $50 a month can mean a dramatic drop in your loan balance over time.

• Remodel

Add a room or a pool to increase your home’s market value. Then ask the lender to recalculate your loan-to-value ratio using the new value figure.

By law, your lender must tell you at closing how many years and months it will take you to pay down your loan sufficiently to cancel mortgage insurance.

Mortgage servicers must give borrowers an annual statement that shows whom to call for information about canceling mortgage insurance.

To calculate whether your loan balance has fallen to 80 percent or 78 percent of original value, divide the current loan balance (the amount you still owe) by the original appraised value (most likely, that’s the same as the purchase price).

For example: Dale owes $171,600 on a house that cost $220,000 several years ago.

$171,600 divided by $220,000 equals 0.78, or 78 percent. So it’s time for Dale’s mortgage insurance to be canceled.

If you can’t persuade your lender to drop mortgage insurance, consider refinancing.

If your home value has increased enough, the new lender won’t require mortgage insurance.

Make sure, however, that your refinance costs don’t exceed the money you save by eliminating mortgage insurance.

If refinancing will let you drop the insurance, shop for a refi mortgage.

Lenders can impose stricter rules for high-risk borrowers. You may fall into this high-risk category if you have missed mortgage payments, so make sure your payments are up to date before asking your lender to drop mortgage insurance.

Lenders may require a higher equity percentage if the property has been converted to rental use.