PMI is insurance that protects the lender if you default on your mortgage. It is typically required if your down payment is less than 20% of the home’s purchase price. PMI can be canceled once you have enough equity in your home.
How much does PMI cost?
The cost of PMI can vary depending on factors like your credit score, mortgage loan type, and down payment size. On average, PMI ranges from 0.3% to 1.5% of the original loan amount per year, typically added to your monthly mortgage payment.
Can I remove PMI from my mortgage?
You can request to remove PMI once your loan-to-value (LTV) ratio reaches 80%, either through regular payments or increased home value. Most lenders automatically cancel PMI when your LTV hits 78%, as long as you’re current on your payments.
Contact a PDCU Mortgage Specialist Today
Do you have more questions about when PMI is required, or any other mortgage-related questions? Reach out to our loan department for a mortgage loan application to start your home ownership journey.
