The Quick Read: Sometimes. A refinance can skip a traditional appraisal only when the lender’s automated underwriting system offers it, and the borrower can’t demand that offer. If the offer comes, the lender uses a value estimate and no appraiser visits. If it doesn’t, a full appraisal is required. Either way, the value on the new loan is what decides whether mortgage insurance stays.
That is the whole question in short form. The rest of this piece covers how the offer works, when it doesn’t come, the cheaper route that sometimes beats a refinance, and the decision a homeowner actually has to make.
Key Takeaways
- A no-appraisal refinance is possible on eligible loans, but the automated system decides, not the borrower.
- A new loan at or below 80% of the accepted value generally carries no mortgage insurance.
- Canceling PMI on the existing loan can cost less than refinancing, but it usually needs a valuation of its own.
- A refinance appraisal does not cancel PMI on the old loan. The old loan is simply paid off.
- Cash-out refinances face much tighter limits on skipping the appraisal.
Refinance savings and break-even estimate
The starting figures are an example value with a balance in proportion and a placeholder for costs. Replace them with yours, and enter the current rate from your statement.
Editable benchmark: 7.32% as of October 22, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a refinance quote.
Illustrative starting assumptions: a $350,000 home value, a $245,000 current balance, a current rate you enter and a remaining term seeded at twenty-five years, closing costs seeded at $5,000 as an editable placeholder (not a fee quote) and rolled into the new loan, a thirty-year term at the current Freddie Mac benchmark, and property taxes and insurance estimated at typical national rates. Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The new rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not a refinance quote; a refinance is priced by the lender at lock, and the current rate, the remaining term and the closing costs are figures you enter. The current payment is estimated from the balance, the current rate and the remaining term; the break-even divides the closing costs by the monthly saving and ignores the interest effect of a longer term. On the VA IRRRL the funding fee is added to the loan unless the veteran is exempt. Taxes and insurance are editable estimates. Licensed in sixteen states for consumer mortgages; Lendmire is a broker, never the lender.
How Does a Refinance Get Out of PMI at All?
A refinance ends PMI by replacing the old loan with a new one whose balance is low enough against the home's value. Conventional mortgage insurance is tied to loan-to-value, the loan balance divided by the home's value. Across the conventional programs Lendmire arranges through wholesale lenders, insurance is required above 80% LTV. A new loan at or below 80% of the accepted value generally doesn't need it.
Everything turns on that value. It can come from an appraisal, or from an automated acceptance of the homeowner's or lender's estimate. That is why "no new appraisal" and "no more PMI" are linked in this question. The valuation path sets the number, and the number sets the insurance.
One more point before the mechanics. A refinance resets the rate, the term and the closing costs. PMI savings have to be weighed against those. A broker compares the two on the same home, and Lendmire's conventional loan programs are run through that kind of comparison before anyone commits.
How Can a Refinance Skip the Appraisal?
It skips the appraisal when the lender's automated system issues a value offer. Fannie Mae's version is called value acceptance. Freddie Mac's version is Automated Collateral Evaluation, or ACE. Both let a lender deliver an eligible loan without an appraisal report.
Here is the order a file follows:
1. The lender submits the loan first. The loan goes through Desktop Underwriter or Loan Product Advisor before any appraisal is ordered.
2. The value is an estimate. For a refinance, the value entered is the lender's or borrower's estimate, per Fannie Mae's property valuation FAQs.
3. The system reads the file. It checks loan purpose, LTV, property type, and whether the submitted value agrees with its models. It also looks for a prior appraisal on the property in its database.
4. The feedback comes back. The lender reads the findings to see whether an offer was issued.
5. The offer type sets the next step. No offer means a full appraisal. A property-data offer means a data collector visits to record property details, with no full appraisal. A full value offer means no valuation visit at all.
Fannie Mae's Value Acceptance page lists the eligible transactions. Limited cash-out refinances of principal residences go up to 90% LTV. Cash-out refinances of principal residences are eligible only up to 70%. The property types covered include one-unit homes and condos. Final terms depend on the lender's guidelines, the property type, and the borrower's complete credit picture.
Freddie Mac says on its ACE page that borrowers skip the appraisal fee, about $600 on average, and that refinances with ACE closed faster on average. Those are Freddie Mac's averages, not a promise on any single file.
Why Won't the Offer Always Come?
The offer fails when the system lacks data or doesn't trust the estimate. Fannie Mae says a prior appraisal on the property generally must be found in its data. A home that has never been appraised under an agency loan, or one with little history, often gets no offer.
Other reasons the system may decline:
- The submitted value is higher than the model supports.
- The loan purpose or LTV falls outside eligibility.
- The property type is outside the program. Two- to four-unit homes generally sit outside the no-appraisal path.
- The home is something the system can't read well, such as a unique or rural property.
Here's the catch for borrowers. The lender requests the offer, and the system grants or denies it. A homeowner can ask the broker to try. Nobody can force it. And a low-value finding isn't a reason to push; an appraisal that confirms the number can be better than an offer built on an estimate that later gets questioned.
One term trap: Fannie Mae removed the phrase "appraisal waiver" from its Selling Guide in favor of "value acceptance," per its Selling Guide announcement. Borrowers may still see either phrase. They mean the same thing. And a "value acceptance" loan was not appraised. That surprises people at closing.
Does a Cash-Out Refinance Change the Answer?
Yes. Cash-out loans get a far lower ceiling for skipping the appraisal. Freddie Mac moved cash-out and certain no-cash-out refinances to ACE+ PDR in July 2022, which means a data collector visits the home. It stopped offering plain ACE appraisal waivers on those loans, per Freddie Mac's Guide Bulletin 2022-6. Current Freddie Mac rules are in its Guide section 5602.3, so treat the bulletin as history.
Cash-out has its own leverage cap anyway. Across the conventional programs Lendmire places, cash-out tops out at 80% LTV on a one-unit principal residence, and 75% on two- to four-unit homes and second homes. That's a ceiling, not a target. Anyone refinancing only to drop PMI wants a rate-and-term loan, not cash-out. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
Do You Even Need to Refinance?
Often not. Canceling PMI on the existing loan can beat a refinance, because you keep your current rate, term and closing costs. The Consumer Financial Protection Bureau lays out the federal rules for loans closed on or after July 29, 1999, on single-family principal residences.
- At 80% of original value: you can ask the servicer to cancel. The request goes in writing, you need a good payment history, you certify there are no junior liens, and you show the value hasn't dropped below the original.
- At 78% of original value: the servicer must terminate PMI automatically, based on the scheduled balance.
- Servicer standards: some servicers allow removal under their own rules.
The "original value" part trips people up. Two years of appreciation doesn't count toward it. If the home has gained value and you want PMI off earlier, that's a current-value request, and it needs a new valuation. Fannie Mae's Servicing Guide section B-8.1-04 covers termination based on current value. Servicers may order an appraisal, a broker price opinion or an automated valuation depending on whose loan it is. The cost often lands on the borrower.
So there's a real tradeoff. Cancellation avoids new closing costs but may need its own valuation. A refinance may skip the valuation but brings new closing costs and a reset. Neither is free.
Which Route Fits Which Situation?
| Route | New valuation? | Resets the loan? | Main limit |
|---|---|---|---|
| Automatic termination at 78% | No | No | Based on scheduled balance |
| Request at 80% of original value | Usually no | No | Payment history, no junior liens |
| Request on current value | Yes, in most cases | No | Valuation cost and servicer standards |
| Refinance with value offer | No appraisal | Yes | System must grant the offer |
| Refinance without offer | Full appraisal | Yes | Appraisal cost and risk of a low value |
Think of it as a short decision path. Check how close you are to 80% of original value first. If you're close, wait or request. If appreciation is the story, price out a current-value request against a refinance. If the rate or term is also worth changing, the refinance earns its closing costs. If PMI is the only reason, it rarely does.
What Does This Look Like for Three Borrowers?
These scenarios are hypothetical and use no dollar figures.
The recent buyer with fast appreciation. Consider a homeowner who put 5% down on a principal residence a couple of years ago and watched local prices climb. The original-value rule won't help, because the balance is still far above 80% of what she paid. A current-value cancellation needs a valuation. A rate-and-term refinance might get an automated offer. If the estimate holds and the new loan lands at or below 80%, PMI doesn't carry over. If no offer comes, she decides whether the appraisal fee is worth the risk. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
The long-time owner near the line. Say a borrower is a few payments from the 80% mark on original value, with a clean payment history and no second lien. Refinancing would be the wrong tool. A written request to the servicer does the job, and automatic termination at 78% is the backstop.
The borrower with a second mortgage. Picture a homeowner with a home equity loan behind the first. A junior lien can block cancellation on the existing loan, since the servicer wants a certification of none. A refinance that pays off the first and handles the second may be the only workable path. The program rules for rate-and-term loans allow paying off the existing first mortgage, closing costs and a purchase-money second lien, with only incidental cash back, so the structure matters. A lender reviews it.
On FHA loans the answer shifts. FHA mortgage insurance is a different product. Per Fannie Mae's consumer PMI page, it can be more complicated and may involve refinancing. A refinance into a conventional loan follows the rules here. The FHA Streamline refinance has no appraisal, but it stays inside the FHA system and doesn't end mortgage insurance by way of conventional rules. Don't mix the two up.
What Should You Ask a Lender Up Front?
Ask these before paying for anything:
- Will you submit the loan to the automated system before ordering an appraisal?
- If no offer comes, what happens next, and what does it cost?
- Is my property type eligible for a value offer, including a condo? Condo project review is a separate requirement from the appraisal.
- Does my loan reach 80% or lower on the accepted value?
- What happens if the value comes in low? An appraisal that falls short can leave the borrower paying the fee and still carrying PMI.
- Is my mortgage insurance borrower-paid or lender-paid? Cancellation rights differ when the lender pays and builds the cost into the rate. Raise this early with whoever services the loan.
- Do offers expire or change if the loan amount, address or occupancy changes? They can, so don't sit on one.
What Are the Risks?
Three risks matter most. First, the appraisal that comes in low. You pay for it, and the PMI stays. Second, the reset. A refinance restarts the term and adds closing costs, and a break-even run tells you how many months of PMI savings it takes to recover them. Third, the estimate trap. The system accepts your value only if its models agree, so an optimistic number can mean no offer.
Running the break-even is simple in principle. Divide the new closing costs by the monthly PMI you'd stop paying. That gives you the months to recover. If you expect to move or refinance again before then, the math fails. A broker can run it on your actual figures.
Key Terms Defined
PMI (private mortgage insurance): Insurance on a conventional loan, usually required above 80% LTV, that protects the lender and costs the borrower a monthly premium.
LTV (loan-to-value): The loan balance divided by the home's value.
Value acceptance: An automated offer that lets a lender skip an appraisal on an eligible loan; once called an appraisal waiver.
ACE: Freddie Mac's Automated Collateral Evaluation, its version of a no-appraisal offer.
Property data report: A visit by a trained data collector who records property details without a full appraisal.
Original value: The lower of the purchase price or appraised value when the loan began, used for the 80% and 78% PMI rules.
Junior lien: A second loan secured by the same home, such as a home equity loan.
Frequently Asked Questions
Can I refinance out of PMI without any appraisal at all?
Sometimes, on an eligible loan. The lender submits the file to the automated system, and if it issues a value offer, no appraisal is ordered. The borrower can't force the offer, and eligibility depends on loan purpose, LTV and property type, subject to lender guidelines.
Will the appraisal on my refinance also cancel PMI on my current loan?
No. The refinance pays off the old loan, so its PMI ends because the loan ends. A refinance appraisal is not a cancellation request on the existing loan. If you want to keep the current loan, ask the servicer for a current-value cancellation, which has its own valuation.
Is canceling PMI cheaper than refinancing?
Often, yes, if you are near 80% of original value with good payment history and no junior liens. You keep your rate and term and pay no new closing costs. If you need a current-value valuation, the cost is usually the borrower's. Compare that to refinancing costs before deciding.
Does a cash-out refinance get the same no-appraisal treatment?
No. Fannie Mae's value acceptance ceiling for cash-out on a principal residence is 70%, far below the limited cash-out figure, and Freddie Mac now uses a data-collector visit instead of a plain waiver on those loans. Conventional cash-out also has its own leverage cap and seasoning rules.
What if I have an FHA loan?
FHA mortgage insurance works differently, and a refinance into a conventional loan is the usual way to end it. That new loan follows the conventional rules above, so you'd need to land at or below 80% of the accepted value to avoid PMI. Not every home gets a no-appraisal offer.
If you are weighing a refinance and want the break-even run on your own numbers, Lendmire can help you compare the programs on the same home.
About Lendmire
As a mortgage broker (NMLS# 2371349), Lendmire helps homeowners and home buyers in 16 states with FHA, VA, conventional and jumbo purchase and refinance loans arranged through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and the agency guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae FAQs: Property Valuation
2. Fannie Mae Value Acceptance
4. Fannie Mae Selling Guide Announcement SEL-2025-07
5. Freddie Mac Guide Bulletin 2022-6
6. CFPB: When can I remove PMI?
7. Fannie Mae Servicing Guide B-8.1-04
8. Fannie Mae's consumer PMI page
This article is part of Lendmire’s conventional loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can You Get a Conventional Loan After a New Job or Graduation? · Does a Conventional Loan Always Need a Full Appraisal? · Do You Have to Refinance to Get Rid of PMI on a Conventional Loan?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.