Which statement about Private Mortgage Insurance (PMI) is NOT correct?

Private Mortgage Insurance (PMI) is typically required when borrowers put down less than 20% of the home's purchase price. Understanding the conditions for canceling PMI is crucial for borrowers looking to save on monthly mortgage payments.

The statement about PMI cancellation that is not correct here is that a borrower does not need to meet any current loan status before requesting the cancellation. In reality, the current loan status is important because lenders usually require the borrower to have made timely payments and demonstrate that they are in good standing. Additionally, the cancellation might depend on the current appraised value of the home as well as the remaining loan balance.

The other statements regarding PMI are accurate. For instance, high-risk loans are indeed subject to automatic PMI removal once the loan balance reaches 78% of the original value, correcting for factors that may reduce the lender's risk. Also, the borrower must actively request the removal of PMI once their loan-to-value ratio reaches a certain threshold, and a request can typically be made at 80% of the original purchase price.

These requirements indicate that removing PMI isn't just a straightforward process solely based on the loan's initial terms, but rather it is contingent upon the borrower's current status and established criteria.