Cancel PMI the Smart Way | Raleigh Mortgage Broker Tips

Updated: July 23, 2025 | Originally Published: 2025 | by Kevin Martini

If you’re a homeowner in Raleigh or anywhere in North Carolina, there’s a good chance you’re paying Private Mortgage Insurance (PMI). And if you’re like most, you’d love to cancel it yesterday.

The good news? Canceling PMI isn’t just possible—it can be strategic. The key is knowing when and how to do it the right way so you can stop paying more than you need to and start building wealth faster.

In this guide from the Martini Mortgage Group, you’ll learn exactly how to cancel PMI and why working with a Raleigh mortgage broker who takes a fiduciary approach makes all the difference.

What Is Private Mortgage Insurance (PMI)?

Private Mortgage Insurance (PMI) is a monthly fee most homeowners pay when they put down less than 20% on a conventional loan. It protects the lender—not you—in case of default.

Typical cost: 0.3% to 1.5% of the loan amount per year
Who pays it? Homebuyers with a conventional loan and less than 20% equity
Can it be removed? YES—and faster than many people realize

3 Smart Ways to Cancel PMI in Raleigh

Here’s how homeowners in Raleigh can strategically cancel their PMI:

1. Automatic PMI Cancellation

Federal law requires automatic PMI cancellation once your loan-to-value ratio (LTV) hits 78%—based on the original appraised value of the home.

✅ Pro: You don’t need to do anything.
❌ Con: It might take years depending on how fast you pay down your mortgage.

2. Request PMI Cancellation at 80% LTV

You don’t have to wait until 78%. If your LTV reaches 80%, you can proactively request PMI removal.

Pro tip from Kevin Martini: If your home has appreciated in value—which is common in Raleigh real estate—you might hit 80% equity much sooner than your loan amortization schedule predicts.

You’ll likely need:

A strong payment history (no late payments)
Proof of property value via an appraisal
To make the request in writing to your loan servicer

3. Refinance to Eliminate PMI

With home values rising across the Triangle, refinancing your mortgage could eliminate PMI and potentially lower your interest rate—especially when you work with the Martini Mortgage Group, a trusted Raleigh mortgage lender that puts your goals first.

Curious if refinancing makes sense for you? Schedule a complimentary strategy call with Certified Mortgage Advisor Kevin Martini or Raleigh Mortgage Broker Logan Martini. You’ll receive clear, confidential guidance from a mortgage professional who takes a fiduciary approach—always prioritizing what’s best for you, not the bank.

Why Cancelling PMI Is a Wealth-Building Move

Every dollar you’re putting toward PMI is money not going toward your loan balance, your future, or your family’s financial security.

Here’s why canceling PMI faster matters:

Save thousands over the life of your loan
Accelerate equity growth
Improve cash flow to use toward investments or home upgrades

Common PMI Cancellation Mistakes (And How to Avoid Them)

Even savvy homeowners fall into these traps:

Waiting too long for automatic cancellation
Not realizing their home appreciated
Missing documentation requirements
Assuming FHA mortgage insurance can be removed (it can’t—different rules!)

That’s where the Martini Mortgage Group comes in. As advisors who take a fiduary apprach, we don’t just originate loans—we manage them. Our Martini Mortgages Under Management system tracks your equity position so you know exactly when to cancel PMI or refinance for better terms.

Your Next Step: Get a Personalized PMI Review

Want to know if you’re eligible to cancel PMI right now? We’ll run the numbers, review your loan, and provide a step-by-step strategy based on your goals—not generic rules.

Schedule a complimentary strategy call with Kevin Martini or Logan Martini today.

Frequently Asked Questions About Cancelling PMI in Raleigh

Q: Can I cancel PMI before reaching 20% equity?
A: Typically not, unless you’re refinancing. Most servicers require at least 20% equity based on the original value or a new appraisal.

Q: How do I know if I’ve reached 20% equity?
A: Your mortgage statement is a good starting point, but it doesn’t tell the full story. To confirm, you’ll want to request your official mortgage payoff amount (not just the loan balance) and compare it to your home’s current value—either through an estimate or a professional appraisal.

At the Martini Mortgage Group, we offer proprietary tools that help Raleigh homeowners accurately estimate their equity position by calculating both their home’s value and their true payoff amount.

Q: Can refinancing remove PMI?
A: Yes! If your new LTV is under 80%, refinancing through a Raleigh mortgage broker like Martini Mortgage Group can eliminate PMI and save you money.

Q: What’s the difference between PMI and MIP?
A: PMI is for conventional loans. MIP (Mortgage Insurance Premium) is for FHA loans and typically lasts the life of the loan unless refinanced into a conventional loan.

Q: Does PMI cancel automatically on FHA loans?
A: No. FHA loans require refinancing to a conventional loan in most cases to eliminate MIP.

Q: Will an appraisal be required to cancel PMI?
A: If you’re requesting PMI removal before automatic cancellation, yes, it is highly likely a new appraisal will be required to prove current home value.

Q: What if my loan servicer refuses to cancel PMI?
A: They must comply with federal law. The Martini Mortgage Group can help you prepare and present the necessary documentation to support your case.

Q: Can I cancel PMI if I missed a mortgage payment?
A: You must have a solid payment history—typically no late payments in the past 12 months.

Q: Is PMI tax deductible?
A: No, PMI is not tax deductible for your personal home mortgage through 2025. Consult a tax professional for the most up-to-date rules.

Q: Is PMI cancellation worth it if I plan to move soon?
A: Yes! Even short-term savings can add up.

Final Thoughts from Kevin Martini

If you’re paying PMI in Raleigh or anywhere in North Carolina, don’t wait for the system to do it for you. Let’s take control of your mortgage strategy so you can build wealth, reduce waste, and feel confident every step of the way.

Because this isn’t just about a loan—it’s about your long-term lifestyle, security, and freedom.

Unlocking Home Equity: The Power of Cash-Out Refinance with Martini Mortgage Group

Updated: August 31, 2023 | Originally Published: 2023 | by Kevin Martini

Homeownership stands as a monumental landmark in one’s life. As the foundation for countless memories and a testament to hard work, it’s no wonder homeowners prioritize its upkeep. Yet, renovations often come with a hefty price tag, making the dream of modern upgrades elusive for some. Enter the solution: cash-out refinance.

A cash-out refinance can efficiently leverage the equity you’ve built in your home for various needs. Unlike credit cards, personal loans, or second mortgages, cash-out refinance allows homeowners to streamline their finances while investing back into their property and/or since a cash-out refinance can be multifaceted, from covering repair bills and consolidating debts to even settling outstanding student loans.

Certified Mortgage Advisor and Raleigh mortgage broker Kevin Martini dives into the intricacies of cash-out refinance. His goal? To equip homeowners like you with the knowledge to navigate this financial avenue confidently.

What Is Cash-Out Refinance?

In its essence, cash-out refinance offers a fresh financial start. Homeowners can secure a new, larger mortgage, using the difference between their current mortgage and the new loan amount as a lump sum in hand. For instance, if there’s an outstanding mortgage of $150,000 on a home valued at $250,000, one might refinance for $200,000. The initial $150,000 serves to clear the first mortgage, and the extra $50,000 is available to use as seen fit.

Top 3 Advantages of Cash-Out Refinance

Unlocking Home Equity
Your home equity, the portion of your property, is genuinely yours. The simple formula to understand this is: Current Market Value of Home − Outstanding Mortgage Balance = Home Equity
Consolidating Debt
Many homeowners find relief in using their cash-out refinance proceeds to consolidate looming high-interest debts. This not only trims the number of payments they juggle but may also lead to a reduction in the overall interest they owe and, ultimately, to a lower monthly outflow.
Home Improvements Investment
Elevate your living experience by channeling funds from your cash-out refinance towards significant home improvements. Besides enhancing living conditions, it can also amplify the property’s market worth.

Eligibility and Prerequisites for Cash-Out Refinance

Sufficient Home Equity: Typically, you have at least 20% equity in your home after the cash-out refinance.
Consistent Income Stream: Proof of a reliable income to ensure you can manage the monthly mortgage payouts.
Credit Score: Although specific requirements may differ, a robust credit score can grant you better terms and approval odds.
Interest Rate Considerations: Cash-out refinance rates can edge out slightly higher than rate-and-term refinance rates, given the more substantial loan size.

Expert Insight From Certified Mortgage Advisor Kevin Martini

While many focus on the mortgage rate, the larger picture is harnessing the cash-out refinance to lower your total borrowing cost. Most Martini Mortgage Group clientele enjoy commendable mortgage rates. Even with the prevailing mortgage rate conditions, the strategy of debt consolidation through cash-out refinance remains a winner.

It’s vital to differentiate between two primary refinances: cash-out and rate and term. The former typically comes with a premium.

A reminder from Kevin: Mortgage rates ebb and flow. The question isn’t whether the Federal Reserve will rein in inflation but when. Forecasts from the Mortgage Bankers Association project a 5% 30-year fixed mortgage rate by 2024’s close. Thus, acting now on a cash-out refinance can secure you a stronger financial footing, both immediately and down the line.

For personalized guidance on whether a cash-out refinance aligns with your financial vision, reach out to the Martini Mortgage Group.

Certified Mortgage Advisor and Raleigh Mortgage Broker Kevin Martini

2-1 Buydown: A Strategic Approach to Homeownership in the Current Mortgage Climate

Updated: July 10, 2023 | Originally Published: 2023 | by Kevin Martini

In today’s rapidly shifting and unique real estate landscape, potential homebuyers may feel overwhelmed by the complexity of mortgage choices. For instance, adjustable Rate Mortgages (ARMs) present an alluring proposition with seemingly attractive rates. However, they may hold hidden drawbacks that may emerge over time. By contrast, the less-known strategy of ‘Buydowns’ offers an innovative pathway toward homeownership that could provide more tangible benefits, both immediate and long-term.

Martini Mortgage Podcast | Episode 183 | “Arm vs. Buydown”

What is a Buydown?

A ‘Buydown’ is a mortgage-financing technique where the property seller pays an upfront fee to reduce the interest rates for the initial years of the mortgage. This strategy aims to decrease the borrower’s monthly payments, increasing the home’s affordability.

Comparatively, ARMs may appear glamorous with their initial low-interest rates, but the reality is that these rates are variable and may rise significantly over time. The consequence is a potential increase in the mortgage payment that could strain the homeowner’s finances. Moreover, ARMs often necessitate refinancing, not out of choice, but out of necessity – an eventuality that could come with its own challenges.

On the other hand, a Buydown provides the flexibility to refinance when the timing aligns with the homeowner’s financial strategy. This flexibility can yield significant savings, one of the many unanticipated benefits a Buydown could offer.

Unmasking the ‘2-1 Buydown’ With Raleigh Mortgage Broker Kevin Martini

Diving deeper into the ‘2-1 Buydown concept.’ This approach entails the seller paying a fee at closing that substantially reduces the buyer’s mortgage interest rate. Specifically, the rate decreases by 2% in the first year and 1% in the second year of the loan term.

This innovative approach results in considerably lower monthly payments during the early years of homeownership, thereby improving home affordability. It helps potential homeowner attain their dream home earlier and build equity sooner. This strategy contrasts the scenario where individuals prolong their tenant residency while saving for a higher down payment or waiting for more favorable market conditions.

The Strategic Importance of a Buydown in the Current Market

In the current market, characterized by periodic price reductions and rising mortgage rates, the ‘2-1 Buydown’ could be a potent negotiation tool. Interestingly, more sellers are inclined to consider a Buydown rather than reducing the property’s asking price.

This stems from the fact that a well-structured ‘2-1 Buydown’ can have a greater impact on reducing a buyer’s monthly payments than a simple price cut. Such a significant reduction in monthly expenditure can greatly enhance the feasibility of homeownership for many buyers.

Preparing for Interest Rate Fluctuations with a Buydown

The journey of homeownership using a ‘2-1 Buydown’ continues after the first two years. As the third year begins, the interest rate reverts to its standard ‘note rate.’ This is where the strategic foresight behind a Buydown becomes evident. If market interest rates remain stable or increase, homeowners typically continue with the loan and regular payments.

However, suppose a forecasted recession leads to a decrease in mortgage rates. In that case, the Buydown strategy allows homeowners to refinance at these lower rates. It’s important to remember that interest rates are cyclical, rising in booming economic conditions and falling during a recession. Having a Buydown in place gives homeowners the adaptability to maneuver these economic cycles. In addition, any unused portion of the “2-1 Buydown’ is returned to the borrower.

Tax Benefits of a Buydown

A discussion about Buydowns would only be complete by touching on their potential tax benefits. The buyer can claim seller-paid Buydowns as tax-deductible if they itemize their tax deductions, even though the seller covers the cost. Similarly, sellers can deduct the Buydown payment made on behalf of the buyer against their capital gain upon selling the property, considered a “cost of sale.” For more details on these tax benefits, buyers and sellers can refer to IRS Publication 936. It’s always advisable to consult with a tax professional to understand fully how these benefits might apply to individual circumstances.

The Martini Mortgage Group Bottom Line

Choosing between an ARM and a Buydown is not a decision to be taken lightly. While sometimes an ARM might be the best choice, most often, a Buydown proves to be a more potent strategy in securing homeownership.