Just a question about PMI, if I were to purchased a home for $250,000, put 5% down on a conventional loan ($12,500), I would need a additional $37,500 to get to 20%. Say 6 month later I get the home appraised and the appraisal at $280,000. Would I be able to send a $7,500 payment to the principle and get the PMI removed?
There are a couple of non-conventional ways to get rid of PMI too.
VA loan USDA loan Navy Federal Credit Union loan
None of those above require PMI at all. You could also check to see if your local credit unions would cut you a deal with no PMI if you refinanced the loan through them. Of course, paying the closing costs might mean you pay more through closing costs than you do in PMI!
You will need to check your mortgage paperwork. If it's a FHA loan, you might be required to have a 5 year payment history before you can get rid of the PMI. Some mortgages require 78% LTV before you can get rid of PMI.
Unfortunately, while the rules of thumb are pretty good, there's no true answer without seeing your actual mortgage's terms and conditions to determine if you can get rid of that pesky bugger. Good luck - hope you can get rid of it ASAP! Try to keep paying the same amount on your mortgage, though; it'll help you pay it off more quickly!
Well the quickest way to remove PMI would be to paydown the mortgage to the appropriate level - generally 80% loan to value. The second way is to pay for a new appraisal and if the figure comes in higher than the appraisal value on file, the you have increased your equity in the property. And hopefully closing the PMI gap. You can also do BOTH if the appraisal comes in higher but not enough to remove it. You can also paydown the difference.