Ask the Expert: I built equity in my house. Now how do I get rid of the PMI?

Private mortgage insurance, or PMI, is required when you buy a house using a conventional loan and make a downpayment that’s less than 20 percent of the home’s price.

Naturally, most homebuyers want to get rid of that extra amount on their monthly mortgage payments.

You have the right to remove PMI in two ways: you can get ‘automatic’ or ‘final’ PMI termination at certain home equity milestones, or you can request the removal when you reach 80 percent home equity.

* Automatic trigger: This occurs when your mortgage balance reaches 78 percent of the purchase price or at a set time period of halfway through your amortization schedule. Payments must be up to date.

* You can request removal of PMI when the loan balance reaches 80 percent of the original value. Some homeowners hasten the process by making extra payments toward their principal. You make the PMI cancellation request in writing to the lender.

* You might be able to refinance out of PMI, which tends to apply when mortgage rates are low and values are on the rise. It usually takes two years before you can refinance.

* Get the home reappraised. Calculate the cost of an appraisal against your savings, but if your home’s value has risen appreciably, this could be a good strategy.