Questions about PMI and reserves

First time home buyer with a couple of questions about PMI and reserves. Regarding PMI, I've read that after you have 20% equity in your house you can ask to discontinue PMI. I assume it's the bank that makes this decision and it may require another appraisal. Would there be any reason for a bank to deny this request (assuming you have 20% equity based on re-appraisal)? Is this common? Regarding reserves, I understand that one of the reserves you have to pay are property taxes for the remainder of the tax year. But property taxes are also included in your mortgage payment. My question is: assuming the mortgage (including property taxes) is paid on time, what happens to the reserves? Thanks in advance. by samross887 from Houston, Texas. Mar 30th 2010 Reply