Drop PMI LTV
The loan-to-value ratio at which Private Mortgage Insurance is automatically canceled.
Example Result
Sample DataBased on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.
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Drop PMI LTV (threshold you set)
Calculations That Use Drop PMI LTV
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Setting this threshold correctly ensures PMI drops at the right time. A common target is 80% LTV. Once your current LTV (Loan Amount / Property Value) falls below this threshold, you can request PMI removal from your lender and stop paying the monthly PMI premium — improving cash flow by that amount immediately.
Detailed Explanation
Drop PMI LTV is the loan-to-value (LTV) threshold you set at which point Private Mortgage Insurance (PMI) is automatically canceled. By law (Homeowners Protection Act), lenders must cancel PMI when the loan balance reaches 78% LTV based on the original purchase price and amortization schedule — but you can request cancellation at 80% LTV once your equity reaches that level. For investment properties, lender policies vary, so this threshold is configurable. As your loan pays down and/or your property appreciates, the LTV drops. Once it crosses below your Drop PMI LTV setting, the monthly PMI charge is eliminated, directly improving your cash flow.
Example
Based on a sample $385,000 property with $2,850/month rent, 20% down, 7% interest rate.
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