🏠💼 Wondering what Private Mortgage Insurance (PMI) is? PMI is insurance that protects the lender—not you—if you stop making payments on your loan. Here’s what you need to know:
🔍 When is PMI Required? Typically, if you put down less than 20% on a home, lenders require PMI to protect themselves from the increased risk of a default.
đź’µ How Much Does It Cost? PMI fees can range from 0.3% to 1.5% of the original loan amount annually, depending on your down payment, loan term, and credit score.
🔄 How to Avoid PMI? The simplest way is by putting down at least 20% of the home’s purchase price. Alternatively, consider different loan types like a VA loan, which doesn’t require PMI.
âś… Benefits: While it's an additional cost, PMI allows you to purchase a home sooner without waiting years to save for a 20% down payment.
🚫 Canceling PMI: You can request to cancel PMI once your mortgage balance falls to 80% of the home’s original appraised value. It automatically drops off at 78%.
Understanding PMI can help you better manage your home buying budget and timelines. Have questions or need guidance? Let’s chat!
