By the end of this guide, you will know whether a refinance can remove your monthly mortgage insurance, what the switch would cost, and how to compare offers without a hard credit pull. A refinance to eliminate mortgage insurance works only when the numbers clear a break-even test, so each step builds toward that math. Before you start, gather your latest mortgage statement, your loan type (FHA, conventional, or USDA), your purchase date, and a rough sense of your home’s current value. Duane Buziak, a Henrico-based mortgage broker serving Glen Allen, Short Pump, and Innsbrook homeowners, walks through each step.
Written by Duane Buziak, NMLS #1110647 | Coast2Coast Mortgage LLC NMLS #376205
Step 1: Identify Which Type of Mortgage Insurance You Are Paying
Open your latest mortgage statement and your original closing disclosure. Look for a line labeled PMI, MIP, or an annual fee. The label tells you which removal rules apply, and the rules differ a great deal.
- PMI (private mortgage insurance): charged on conventional loans with less than 20% down. It can be cancelled, and it ends automatically at a set point.
- MIP (mortgage insurance premium): charged on FHA loans. Removal depends on your down payment and when the loan was originated.
- USDA annual fee: a yearly guarantee fee collected monthly on USDA loans. It generally stays for the life of the loan.
For FHA loans, the rules depend on your original down payment. As of 2026, many FHA loans with less than 10% down carry MIP for the life of the loan, and those with 10% or more down carry it for 11 years. That is why FHA owners often cannot cancel and instead refinance out of FHA. Check the current terms on the HUD FHA mortgage insurance page, because they have changed over the years and your case number date matters.
The most common mistake here is assuming a refinance is required. A conventional borrower often has a cheaper path. The Homeowners Protection Act gives conventional borrowers the right to request cancellation and requires automatic termination at set thresholds. The CFPB explains these rules on its page about removing PMI from your loan. Read it before you spend anything on closing costs.
Step 2: Check Whether Simply Canceling Is Cheaper Than Refinancing
If you have conventional PMI, start with cancellation. You may request it once your balance reaches 80% of your home’s original value, and the servicer must terminate it automatically when your scheduled balance reaches 78%. Servicers commonly require a good payment history, no subordinate liens such as a second mortgage or HELOC, and sometimes a new appraisal or broker price opinion to show the value has not dropped.
Call your servicer and ask for a written cancellation checklist. Get it in writing so you know exactly what they need, whether they will accept a current value instead of the original value, and who pays for any appraisal. A typical appraisal costs a few hundred dollars. A refinance costs thousands.
Refinancing makes more sense in these cases:
- Cancellation is blocked. This is true of FHA and USDA loans, where no cancellation request exists in the same way.
- Values rose faster than your payments. Many Henrico neighborhoods have seen strong appreciation, so you may be below 80% of today’s value long before your amortization schedule gets you to 80% of the original price. Some servicers will not use current value for cancellation, or only after a seasoning period, so a refinance can get you there sooner.
- Your rate can also drop. If the refinance does two jobs at once, the case gets stronger.
The mistake to avoid is refinancing into a higher rate just to drop PMI without running the numbers. Removing a $150 monthly premium means little if the new rate adds $200 to your payment. Step 5 shows how to test this.
Step 3: Estimate Your Home’s Current Value and Loan-to-Value Ratio
Loan-to-value (LTV) is your current loan balance divided by your home’s value. A $380,000 balance on a $475,000 home gives you an LTV of 80%. A conventional refinance without mortgage insurance generally requires an LTV of 80% or below. Conventional financing tops out at 90% LTV for cash-out, and anything above 80% on a conventional loan will still carry PMI.
Do not rely on an automated estimate alone. Pull recent closed sales of similar homes in your own neighborhood, whether that is Wyndham, Twin Hickory, Lakeside, or Tuckahoe. Match square footage, age, lot, and condition, and use sales from the last few months. Henrico County also publishes property assessment records through its Real Estate Assessment office. Assessments are a useful sanity check on direction, but they do not replace an appraisal, which will make the final call.
Two notes on special cases:
- FHA to conventional: owners who bought with a low down payment in a rising-value area often cross the 80% line without noticing. If that is you, this is the strongest refinance candidate.
- VA loans: VA borrowers pay no monthly mortgage insurance at all, so there is nothing to eliminate. A VA cash-out refinance (up to 100% LTV) is a different conversation about accessing equity, not removing a premium.
Higher-balance owners in Short Pump and Innsbrook should also check the conforming limit. FHFA announced 2026 baseline and high-cost limits, with the high-cost ceiling at $1,249,125 as of its 2026 conforming loan limit announcement. Confirm the figure for Henrico before assuming your balance fits under it.
Step 4: Confirm Your Credit, Income, and Debt Are Ready for a Conventional Refinance
Moving from FHA to conventional means qualifying under conventional standards. Three things drive the answer, and exact minimums vary by program and by the broker’s wholesale options:
- Credit score: conventional pricing moves in tiers. A higher score earns a lower rate and smaller mortgage insurance charges, and a lower score can erase the savings you are chasing.
- Debt-to-income ratio (DTI): your monthly debts, including the new housing payment, divided by gross monthly income. Programs set different ceilings.
- Documentation: recent pay stubs and W-2s if you are salaried. Self-employed owners should expect to provide two years of tax returns. Have bank statements ready too.
You can see where you stand before any hard inquiry. Duane Buziak offers credit-safe pre-qualification using the NoTouch Credit Pull, a soft pull that does not affect your score. That matters because a hard pull from a single-shelf lender, repeated across several shops, can add up. With the soft pull, you learn your likely tier, your DTI, and your options first.
One mistake to avoid: do not open new credit lines or make large undocumented deposits between pre-qualification and closing. A new car loan or a furniture financing plan changes your DTI. A sudden $15,000 deposit forces the underwriter to ask where it came from, and a gift or transfer without a paper trail can stall the file. If you plan a big purchase, wait until after closing.
Step 5: Run the Break-Even Math with a Fully Worked Example
Break-even is your total closing costs divided by your monthly savings. It tells you how many months you must stay in the home before the refinance pays for itself.
Here is an illustration, not a quote. Suppose a Glen Allen homeowner took out an FHA loan of $400,000 at 6.75% on a 30-year term. After about four years, the balance is roughly $380,000. The home is now worth about $475,000, so LTV is 80%.
- Current payment: principal and interest of about $2,594, plus $190 in monthly MIP, for $2,784.
- New loan: $380,000 conventional, 30-year, at an assumed 6.25%, with no mortgage insurance. Principal and interest is about $2,340.
- Monthly savings: $2,784 minus $2,340 equals $444.
- Closing costs: assume $7,600. Break-even is $7,600 divided by $444, or about 17 months.
If you stay longer than about a year and a half, the refinance comes out ahead. If you may sell sooner, it does not. The rate, in this example, is hypothetical, so use your actual quote.
Three variables move the answer: the new rate against your old rate, the closing costs, and how long you plan to stay. You can also roll costs into the loan. In this example, a $387,600 balance gives a payment of about $2,386 and savings of $398 a month, but you owe $7,600 more and pay interest on it. Ask about no-out-of-pocket closing options, which may be available depending on the rate and credit structure, and compare them against paying the costs directly.
Watch the term reset. In the example, part of the savings comes from stretching the remaining term back to 30 years. Compare total interest over the life of each loan. You can keep the 30-year loan and keep paying your old principal and interest amount of about $2,594, which shortens the payoff and keeps flexibility if money gets tight. Or choose a shorter term if the payment still works.
Step 6: Compare Offers Across Programs and Pricing
Duane Buziak is a mortgage broker, which means one application gets shopped across hundreds of wholesale lenders instead of a single rate sheet. If the refinance is only worth doing at a certain price, that access can decide it. The Dare to Compare challenge lets you bring in another offer and check whether the pricing holds up.
| Feature | Duane Buziak / Coast2Coast | Single-shelf lender | Why It Matters |
|---|---|---|---|
| Lender access | Brokers your file across hundreds of wholesale lenders | One company’s rate sheet and programs | More options raise the odds that the mortgage insurance line, rate, and fees all work together. |
| Pre-approval credit pull | NoTouch Credit Pull (soft pull) for pre-qualification | Often a hard pull to start | A soft pull lets you see your options without a score impact. |
| Pricing check | Dare to Compare challenge against your other quotes | Price is whatever the one shelf offers | Side-by-side quotes show whether a rate is competitive. |
| Local presence | Henrico-based office at 4860 Cox Rd, Glen Allen | May be remote or out of area | Local knowledge of Henrico appraisals and neighborhoods helps the file move. |
When offers come in, compare the Loan Estimate documents side by side. This is the standardized form every applicant receives within three business days of applying. Focus on four items:
- The interest rate and APR.
- Lender credits, which can offset closing costs.
- Origination charges.
- The mortgage insurance line, which should read zero on a conventional refinance at 80% LTV or below.
If a quote shows mortgage insurance, your LTV or the program does not match what you were told. Ask why before you lock.
Step 7: Apply, Appraise, and Close, Then Confirm the Insurance Is Gone
The sequence is straightforward: lock your rate, order the appraisal, review the Closing Disclosure, and sign. Timelines vary with the appraiser’s schedule, lender workload, and how quickly you return documents, so do not count on a guaranteed number of days. Ask your loan team for the current estimate when you apply. Read the Closing Disclosure carefully. It should show no mortgage insurance, and the numbers should match your Loan Estimate.
The appraisal is where plans most often change. If the value comes in low and your LTV stays above 80%, you have three main options:
- Bring cash to closing to reduce the loan amount enough to reach 80%, if the math still works.
- Wait. Another year of payments and appreciation may get you there. Ask your broker to re-run it later.
- Switch programs. A different structure may fit better, such as keeping the loan and pursuing cancellation if it is conventional.
The Henrico assessment records can help you gauge whether the appraiser’s number is reasonable, but they do not replace an appraisal. If you believe the appraisal missed relevant sales, ask your broker about a reconsideration of value with supporting comparables.
After closing, check your work. Your first new statement should show no PMI or MIP in the payment or escrow. Confirm that your old servicer reports the prior loan as paid off, and that any leftover escrow balance from the old loan is refunded to you. Keep the final documents.
Confirm Your Loan Type and LTV, Then Start with a Soft Pull
Before anything else, confirm two numbers: your loan type and your LTV. If you hold conventional PMI, ask your servicer for the cancellation checklist first. If you hold FHA MIP, or your numbers say a refinance beats cancelling, the next step is to see real pricing.
Your dream home in Henrico County is closer than you think. Discover exactly what you can afford with our credit-safe pre-qualification process that protects your score while unlocking your options. Get pre-qualified today and take the first step toward homeownership with a local mortgage expert who understands your community. You can also call Henrico Mortgage by Duane Buziak at 804-212-8663.