How to Remove PMI in Texas: What Every Dallas Homeowner Needs to Know

Can You Remove PMI on a Texas Home Loan?

Yes. If your conventional loan balance has dropped to 80% or less of your home's original value—or current appraised value under certain conditions—you can submit a written request to your loan servicer to cancel private mortgage insurance. Federal law also requires automatic cancellation at 78% LTV. But in Texas, your servicer won't drop it at 80% on their own. You have to ask. DFW homeowners who bought between 2019 and 2022 have often built significant equity through appreciation and may already qualify.

By Paul Blair | July 30, 2026

If you put down less than 20% when you bought your Dallas-area home, you've been paying private mortgage insurance every month since closing. For most DFW buyers, that's somewhere between $150 and $400 a month—money that goes to the lender's insurer, not your equity, not your principal.

The good news: you may not have to keep paying it.

Dallas home values rose sharply between 2019 and 2022—up 25% in a single year in many northern suburbs—and more modestly since. If you bought during that window with a conventional loan and less than 20% down, there's a real chance the appreciation alone has pushed you past the equity threshold needed to cancel PMI.

But here's what most homeowners miss: your servicer will not automatically drop PMI when you hit 80% loan-to-value. The Homeowners Protection Act requires automatic cancellation at 78% LTV only. At 80%, you have to submit a written request. And that distinction costs a lot of people months of extra payments they didn't need to make.

Here's exactly how the process works in Texas.

What PMI Costs—and Why Cancellation Is Worth Pursuing

PMI rates typically run 0.5%–1.5% of your loan balance per year. The exact rate depends on your down payment, credit score, and loan type at the time of origination.

On a $400,000 loan—roughly the Plano or McKinney price range for 2020–2021 purchases—that works out to:

Over two or three years of avoidable payments, that's several thousand dollars. On a $600,000 loan in Frisco or Prosper, even a 0.5% PMI rate is $3,000 a year.

PMI vs. FHA MIP: The Trap Most FHA Borrowers Don't Know About

Before going further: everything below applies to conventional loans. If you have an FHA loan, the rules are different in one critical way.

With an FHA loan and less than 10% down, you pay mortgage insurance premium for the life of the loan. There is no 78% automatic cancellation. There is no written-request process. The only path out is a refinance into a conventional loan once you have enough equity to qualify—which, given DFW's appreciation, may be well within reach now.

More on the FHA exit path below.

How PMI Cancellation Works: The Three Pathways

The Homeowners Protection Act of 1998 sets the federal baseline for PMI cancellation on conventional loans. In Texas, the Texas Department of Insurance oversees PMI and requires servicers to send an annual written disclosure of your cancellation rights.

Pathway 1: Borrower-Requested Cancellation at 80% LTV

When your loan balance drops to 80% of your home's original appraised value, you can submit a written cancellation request to your servicer. This is the fastest route if you've built equity—but you have to initiate it.

Requirements:

• Loan balance at or below 80% LTV (based on original OR current appraised value)
• Current on all payments
• No late payments in the past 12 months (many servicers check 24 months)
• No secondary liens on the property—no HELOC balance, no second mortgage
• Appraisal confirming current value (required for appreciation-based requests)

Pathway 2: Automatic Cancellation at 78% LTV

Your servicer is required by federal law to drop PMI automatically once your scheduled payments bring your balance to 78% of the original home value—as long as you're current. No request needed.

The catch: "scheduled payments" means based on your amortization schedule. If you've made extra principal payments, your balance may already be at 78%—but the servicer's system may not reflect that until you trigger the recalculation with a written request.

Pathway 3: Final Termination at the Loan Midpoint

If PMI hasn't been cancelled yet, your servicer must terminate it on the first day of the month after you reach the midpoint of your loan term. For a 30-year loan, that's month 181—15 years in.

This pathway is the fallback. If you're still paying PMI 15 years in, something went wrong earlier.

DFW Appreciation and Your PMI Eligibility

If you bought in Plano, McKinney, Frisco, Allen, or anywhere in Collin or Dallas County between 2019 and 2022, your home has almost certainly appreciated substantially from your original purchase price.

DFW's cumulative appreciation during that period was roughly 40–55% in many northern suburbs, with the sharpest gains in 2021. Buyers who put 10% down in 2020 on a $400,000 home—a loan of $360,000—may now hold a home worth $550,000 or more. That's an LTV well below 70%, even with several years of payments.

But here's the wrinkle: standard PMI cancellation at 80% is based on your original appraised value, not current value. To cancel based on original value, your balance just needs to hit 80% of what the home was worth when you closed.

For appreciation-based cancellation—where you use a current appraisal to support a lower LTV—different thresholds apply depending on how long you've had the loan:

• Under 2 years: Most servicers require 75% LTV (25% equity), documented by current appraisal
• 2–5 years: Generally 75% LTV still applies for appreciation-based requests
• 5+ years from origination: Standard 80% LTV applies, supported by current appraisal

If you bought in 2019 or 2020, you're now past the five-year mark—meaning you only need a current appraisal to confirm your home supports an 80% LTV or lower. Given DFW appreciation rates, most homeowners from that period who put 10–15% down are well clear of that threshold.

If you bought in Plano, Frisco, McKinney, Richardson, or the northern suburbs between 2019 and 2022 and are still paying PMI, there's a real chance you qualify to cancel it now. Schedule a private consultation with a Grey Square agent to run the numbers on your specific loan and situation: greysq.com/contact.

How to Request PMI Cancellation in Texas: Step-by-Step

Step 1: Find your current loan balance. Log in to your servicer's online portal or call the servicing number on your mortgage statement. Get the current principal balance.

Step 2: Calculate your LTV. Divide your current loan balance by your home's value.

• For original-value cancellation: loan balance divided by original appraised value
• For appreciation-based cancellation: loan balance divided by current market value (you'll need an appraisal to support this number)

Step 3: Determine which pathway applies. If your balance on the scheduled amortization schedule is already at or below 78–80% of the original value, you may be able to request cancellation without a new appraisal. If you're relying on appreciation, order the appraisal first.

Step 4: Order an appraisal if needed. For appreciation-based cancellation, most servicers require a full appraisal ordered through their approved appraiser panel—not one you order independently. Call your servicer first to confirm their requirements before spending money on an appraisal they won't accept.

In Dallas and Collin County, PMI removal appraisals typically run $400–$600. Some servicers accept a broker price opinion instead, at $75–$150, but this is less common.

Step 5: Submit a written cancellation request. Send a certified letter—return receipt requested—to your loan servicer's PMI cancellation address (different from the payment address). Include:

• Your loan number
• Current outstanding balance
• Your request to cancel PMI, citing the Homeowners Protection Act
• Supporting appraisal (if applicable)

Step 6: Follow up within 30 days. Your servicer is required to respond in writing within 30 days. If denied, they must provide written reasons. Document everything.

What If You Have an FHA Loan?

If you took an FHA loan with less than 10% down, you're paying MIP for the life of the loan. There is no standard cancellation process—your exit is a conventional refinance.

If your home has appreciated to the point where you'd have 20% equity in a new conventional loan, a refinance eliminates MIP entirely: no PMI, no MIP, nothing. You'll pay closing costs (typically $3,000–$5,000 in Texas), so the question is whether the monthly savings justify the upfront expense.

The break-even on eliminating FHA MIP through refinance is often 18–36 months. For homeowners planning to stay for several more years, the math frequently works. But you need to run both the rate and the insurance cost together—it's possible to refinance out of FHA MIP and into a higher rate, which defeats the purpose.

This is exactly the kind of calculation worth doing before you move, not after. If you're sitting on significant equity and considering your options, a cash-out refinance in Texas and a HELOC are two other tools worth understanding—they accomplish different things, and knowing the difference changes the decision.

Frequently Asked Questions

How long does PMI removal take in Texas?

Once you submit a written request with supporting documentation, your servicer must respond within 30 days under federal law. If an appraisal is required, budget an additional two to three weeks for scheduling and delivery. In most cases, the full process takes four to eight weeks from initial request to PMI cancellation and confirmation.

Does my servicer have to notify me when I qualify?

The Texas Department of Insurance requires servicers to send an annual PMI disclosure letter that includes your estimated cancellation date and the conditions needed for early removal. This notice arrives with your year-end mortgage documents or as a standalone mailing. It describes your rights—but it does not initiate cancellation. You have to submit the written request yourself.

Can I cancel PMI if I have a HELOC on my home?

An open HELOC with an outstanding balance is treated as a secondary lien and generally blocks PMI cancellation. If your HELOC is open but has a zero balance, some servicers will still approve cancellation with documentation—but it varies by servicer. Check your servicer's written policy before assuming you're blocked.

My home's value has fallen since I bought. Can I still cancel PMI?

If your current appraised value is lower than the original purchase price, appreciation-based cancellation isn't available. You'd need to wait until your scheduled principal payments bring your balance to 78% of the original purchase price, at which point automatic cancellation kicks in.

Does canceling PMI affect my homestead exemption or property taxes?

No. PMI is a private insurance product between you and your lender. Canceling it has no effect on your homestead exemption filing with DCAD or CCAD, your assessed value, or any other government records. Your tax assessment and your mortgage insurance are entirely separate.

What should I look for in an agent when I'm thinking about PMI, equity, and next steps?

Canceling PMI is often just one piece of a larger financial conversation—about whether to stay in your current home, refinance, access equity, or start planning your next move. If you're a DFW homeowner who bought in the 2019–2022 window and you're starting to think through those decisions, Paul Blair has been working with buyers and sellers across Dallas and the northern suburbs for 22 years. The right conversation at the right time can save you thousands before you ever list or sign. Schedule a private consultation at greysq.com/contact.

Take Action Before You Keep Paying

PMI isn't permanent—but your servicer isn't going to alert you the moment you're eligible to cancel it.

If you bought in DFW between 2019 and 2022 with a conventional loan and less than 20% down, your equity position has likely shifted significantly. A current appraisal and a written request to your servicer may be all it takes to eliminate a $200–$400/month expense that's no longer legally required.

If you bought with an FHA loan during the same period, your path to removing mortgage insurance runs through a refinance—and whether that makes sense depends on your current rate, your remaining balance, and what you plan to do with the home over the next several years.

If you also experienced an escrow shortage recently—where your servicer increased your monthly payment to cover rising taxes and insurance—canceling PMI can partially offset that increase and give you some breathing room.

Whether you're thinking about eliminating PMI, understanding your equity position, or beginning to think about your next move in McKinney, Prosper, Richardson, or anywhere in the DFW metro, the Grey Square team is here to help you run the numbers. Schedule a private consultation at greysq.com/contact.

About Paul Blair

Paul Blair had this exact conversation with a Plano client in 2022—she'd bought in 2019 with 10% down, her home had appreciated nearly 40%, and she'd been paying $280 a month in PMI she no longer needed. One written request and a $450 appraisal later, she was done.

Paul Blair is the founder and broker of Grey Square, a virtual real estate brokerage representing buyers and sellers across Dallas and Los Angeles. With 22 years in the business and more than $200 million in closed transactions, Paul works the full range of the market, from luxury homes in the Park Cities and Preston Hollow to estates in the Hollywood Hills and across the Westside. Connect with Paul and the Grey Square team at greysq.com. TX TREC #9011505 · CA DRE #01792671.