Reply #4: PMI is on your loan because the original Loan To Value ratio was greater than 80%.

[bluesbassman]

All mortgages that are written to Fannie Mae guidelines are subject to PMI if the LTV is greater than 80%. If your LTV is less than 80% now, you should be able to have the PMI removed. This generally requires a full appraisal (paid by you) to validate the current value. If the bank is telling you you can't re-fi it's because they probably did a Automated Valuation appraisal and determined your LTV is greater than 80%.

Most major lenders will not refi a loan for greater than 80% LTV. If your current rate is really high on a 30yr fixed, or you have an Adjustable Rate Mortgage that's due to adjust, your options would be to pay down your principle to less than 80%, or speak with a Mortgage Broker who may be able to place your refi with a smaller lender, or you could refi into an FHA loan. The upfront costs on the FHA are a little higher than a conventional loan, but the rates are pretty low right now.