How Much Does Private Mortgage Insurance Cost?
you’ll likely be paying PMI or Private Mortgage Insurance.
If you are looking to buy a home but are putting in less than a 20% down payment,
PMI is an insurance policy for the lender in case you stop making your monthly payments.
Depending on your LTV (loan to value) ratio and other factors, your PMI cost may vary.
Here is a guide on PMI, how much PMI is,
and other facts you should know before paying PMI.
What Is PMI?
PMI is essentially an additional payment as part of your mortgage that acts as insurance for the lender of a mortgage if the borrower stops paying back their loan.
You’ll only have PMI to pay if you put a down payment of less than 20% on your home.
You can request to have the PMI portion of your mortgage payment canceled once you’ve reached the 20% equity in your home,
When Is PMI Required?
PMI may be required when you’re purchasing a house or refinancing your mortgage. In addition, lenders may require PMI on certain loans if:
Your down payment is less than 20%, or for refinance loans: Your loan-to-value ratio is over 80.
If you’re refinancing your current mortgage, most conventional lenders require an LTV ratio of 80% or less to avoid paying PMI.
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