What is PMI?

You might have heard you need 20% for a down payment on a home. But that’s not always true. In fact, many homebuyers can get a mortgage with as little as 0% down. However, in most cases where your down payment is less than 20%, lenders will typically require you to pay for private mortgage insurance, or PMI, to protect themselves in case you’re unable to make your payments.

PMI is usually added to your monthly mortgage payment and typically costs between 0.6% to 1.9% of your loan amount annually, although a high credit score and/or rising property values in your area could help keep that cost on the lower end.

There’s a light at the end of this tunnel — once you build up 20% equity in your home value, you can say goodbye to PMI!

For more details on this subject, see LaurelRoad.com.