Why agents care
PMI is often what stops buyers from buying until they have 20% down. Showing the monthly cost and when it ends helps buyers weigh buying sooner against waiting.
Glossary term
PMI (private mortgage insurance)
Private mortgage insurance protects the lender if a borrower with less than 20% down defaults on a conventional loan. It's usually paid monthly. Borrowers can generally request cancellation at 80% loan-to-value of the original value, and it ends automatically at 78% under the Homeowners Protection Act, if payments are current.
Example
Example: at a 0.55% annual rate on a $382,500 loan, PMI is about $175 a month and drops off once the balance reaches 78% of the original value on schedule.
Pairs well with
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Questions by topic
PMI (private mortgage insurance): common questions
Can PMI be removed early?
Borrowers can request removal at 80% loan-to-value if they meet lender requirements. Some lenders allow removal based on a new appraisal after appreciation.
Is PMI the same as FHA mortgage insurance?
No. FHA uses MIP, with different rates and durations.
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