Private Mortgage Insurance

Private mortgage insurance is required for any loan that has a down payment of less than 20% and is put in place for protection of the lender in case the borrower defaults on the loan. Once you have 20% or more equity on your home, you can stop making PMI payments. The average cost of insurance is between.5 and 1.0% of the loan amount, but is dependent on loan specifics. The only advantage to the borrower to have PMI is the ability to make a down payment less than 20%, otherwise it is in place for the lender’s security and protection.

Mortgage Insurance Companies:

 

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