My experience says:
If this is for an existing loan, you need to have the equity and be able to prove it with an appraisal.
If it is for a new loan, you still need the equity, or a special program that allows for "extra" loans that are usually subordinate to the first.
I would contact a local lending professional to help with this answer and to save time and money.
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If you already have a loan with PMI the only way to remove the PMI is to refinance if you are certain that the value of your property is at least 20% higher. If you trying to purchase a home with no PMI Terry Fansworth answers are correct!
If you don't have 20% dow but have 5-10% we lenders can do LPMI ) lender paid mortgage insurance or we can get use a PMI Company that can offer you several options either to buy out the PMI or do a split premium, etc. Contact a lender in your area and they can further explain how to accomplish this.
1. Put 20% down (i.e. a conventional loan)
2. Use HomePath financing. You'd be limited to Fannie Mae owned properties in this case. Fannie created a set of guidelines that lenders must follow to entice buyers to purchase these properties. The caveat is that the interest rate if often higher here.
3. 80/10/10 or 80/15/5 financing. Essentially, if you have 10% or 15% to put down, you can secure two separate loans for the remainder - thus avoiding PMI (one loan for 80%, another for the remaining 10%). The "catch" here is that often the interest rate on the second financing product is higher (i.e. a home equity line of credit, etc).
Also, keep in mind, with the above examples - mortgage interest is fully tax deductible (for now), while PMI is not. So, in my opinion - if I had to choose between a slightly higher interest rate, or paying PMI until I've reached 20% equity in my home - I'd take the higher interest rate (depending on how high it is). This is only my opinion however - you'll need to take into account your personal situation & the interest rate you are quoted, crunch the numbers, and decide what's right for you.
Your best bet is to consult with a mortgage broker to explore all your options, and what makes the most sense from a financial pespective given your individual situation.