Also called PMI, is a type of mortgage insurance you might e required to pay for if you have a conventional loan. Like other kinds of mortgage insurance, PMI protects the lender—not you—if you stop making payments on your loan.
PMI is arranged y the lender and provided y private insurance companies. PMI is usually required when you have a conventional loan and make a down payment of less than 20 percent of the home’s purchase price. If you’re refinancing with a conventional loan and your equity is less than 20 percent of the value of your home, PMI is also usually required.
How do I pay for PMI?
There are several different ways to pay for PMI. Some lenders may offer more than one option, while other lenders do not. efore agreeing to a mortgage, ask lenders what choices they offer.
The most common way to pay for PMI is a monthly premium.
- This premium is added to your mortgage payment.
- The premium is shown on your Loan Estimate and Closing Disclosure on page 1, in the Projected Payments section. You will get try this site a Loan Estimate when you apply for a mortgage, efore you agree to this mortgage.
- The premium is also shown on your Closing Disclosure on page 1, in the Projected Payments section.
Sometimes you pay for PMI with a one-time up-front premium paid at closing.
- This premium is shown on your Loan Estimate and Closing Disclosure on page 2, in section .
- If you make an up-front payment and then move or refinance, you may not e entitled to a refund of the premium.