How Much Is PMI (Private Mortgage Insurance)? What You Need to Know

If you are looking to buy a home but are putting in less than a 20% down payment, you’ll likely be paying PMI or Private Mortgage Insurance. 

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.

What Is PMI?

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%: Most conventional lenders require a down payment of at least 20% of the purchase price.

For refinance loans: Your loan-to-value ratio is over 80%. If you’re refinancing your current mortgage.

If you do need to pay PMI, your lender, not you, will choose the provider of the PMI. In most cases, you won’t know the provider as you make the payment directly to your lender, and they will pass the PMI portion along to the PMI provider. 

Who Provides PMI?

When Do You Pay PMI?

Monthly Premium: When paying a monthly premium, our lender adds PMI to your monthly mortgage payment.

Upfront Premium:  It’s a higher cost upfront, but you’ll have a lower monthly mortgage payment moving forward.

Monthly and Upfront Premiums: You’d pay part of the PMI upfront and then add a smaller monthly premium to your mortgage payment.

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