Common Question from Buyers: What is PMI? Working with buyers who are new to the day to day working of real estate I find one of the most common asked questions is “How much do I need to come up with for a down payment?” I go through the steps and explain the list of how the down payment really breaks down. One item on the list is PMI.
What is PMI?
PMI or Private Mortgage Insurance is insurance that lenders require when you’re putting less than 20% down payment for your purchase. PMI protects the bank against loss due to default on a loan.
Can you cancel your PMI?
Yes PMI can be cancelled. Now days banks are require to inform you when your loan has reach the 79% of the original loan value. Here are 4 things to keep in mind about cancelling your PMI:
1. Pay Down of the original loan value must be equal to 80%
2. Your loan payments must be current
3. Some banks are requiring evidence of property value. This can be accomplished by hiring a Certified Real Estate Appraiser.
4. Some bank may require that your loan be in place for a certain amount of time.
Need some advice when buying your home feel free to text, call or email and I will try to help you.