I’m Ben Yost, a Colorado mortgage broker with 25+ years of experience, and this is one of the easiest few-hundred-dollars-a-month wins most homeowners never find out about.
The short answer
You can get rid of PMI (private mortgage insurance) two ways. You can request cancellation once your loan balance reaches 80% of your home’s value, or you can let it fall off automatically at 78% of the original value under the federal Homeowners Protection Act. On a typical Colorado conventional loan, that’s usually $100–$250 a month back in your pocket — often right around $150.
Real talk: one of my clients killed her $150 PMI payment with one appraisal and one letter. No refinance. No new rate. Here’s exactly how it went.
A real Aurora example
A couple I worked with bought a place in Aurora back in 2021 for $385,000. They put 5% down on a conventional loan — smart move, got them in the door — but under 20% down means you pay PMI. Theirs ran about $150 a month. That’s $1,800 a year going straight to the lender’s insurance company, not toward their house.
Fast-forward to this year. Two things happened at once:
- They’d been chipping the balance down to around $340,000.
- Denver-metro home values kept climbing.
We ordered an appraisal (about $550), and the home came in near $430,000. Run the math — $340,000 owed against a $430,000 value is right around 79%. Under the 80% line.
So we sent the servicer a written cancellation request, they confirmed it, and the PMI was gone. Eighteen hundred dollars a year, back in their budget.
They didn’t refinance. They didn’t touch their rate. They just stopped overpaying.
What is PMI, exactly?
PMI is private mortgage insurance. Most people assume it protects them — it doesn’t. It protects the lender if you stop making payments.
You only pay it on a conventional loan when you put down less than 20%. It’s not a penalty and it’s not permanent. It’s a temporary add-on you can remove.
When can I cancel PMI in Colorado?
Two paths:
1. You request it at 80%. Once your balance hits 80% of value, you can ask your servicer to cancel. Here’s the part most lenders won’t tell you: you can generally use a new appraised value, not just your original purchase price. In an appreciating market like Denver or Aurora, that can get you there years early.
2. The law does it for you at 78%. Your servicer is required to automatically drop PMI at 78% of the original value, and to cancel it at the loan’s midpoint if you’re somehow not there yet.
Most homeowners wait for door #2 without realizing door #1 has been sitting open for a year or more.
Does this work on an FHA loan?
This is the big one, and it trips up a lot of Colorado homeowners.
FHA loans don’t carry PMI — they carry MIP (mortgage insurance premium), and on most FHA loans it sticks around for the life of the loan. The usual way to get rid of MIP is to refinance into a conventional loan once you have enough equity.
Different animal, different rules. Worth a five-minute conversation before you assume you’re stuck with it forever.
Why does this matter right now?
A lot of Colorado homeowners are laser-focused on rates and whether it’s worth refinancing. But nobody writes a check for an interest rate — they write a check for a payment. PMI is a piece of your payment you may be able to delete without refinancing at all.
If you bought in Colorado in the last few years with less than 20% down, and Denver-metro values have moved the way they have, there’s a real chance you’re closer to that 80% line than you think.
How do I find out where I stand?
You need three numbers: what you owe today, what your home is worth today, and what loan type you have. That’s it. Divide the balance by the value — if you’re at or under 80% on a conventional loan, you’ve got a case to make.
If you’re not sure, that’s what I’m here for. I’ve been doing this in Colorado for 25+ years, I shop 160+ wholesale investors, and I run 30+ down payment assistance programs — but I’ll tell you straight when the answer is “you don’t need a new loan, you need a letter.”
What to do next
Send me your numbers — balance, rough value, loan type — and I’ll tell you honestly whether you’re close to killing your PMI, or map out how to get there. No pressure, no pitch.
Call or text 303-587-4297, or fill out the contact form and tell me where you’re at.
Go get ‘em.
Ben Yost — Colorado’s Lending Expert, 25+ years • 160+ investors • 30+ DPA programs. Equal Housing Lender. This is general information, not a commitment to lend; PMI cancellation requirements vary by loan and servicer, and terms are subject to change.
Related reading: FHA vs. conventional loans in Colorado · How much house can I afford in Colorado? · How much money do you actually need to buy a house in Colorado? · Denver metro home buying guide. See all loan programs and services.
