First Home or Fifth, You Can't Have TMI about PMI
What is PMI? It's basically an insurance policy that covers the lender should you stop making house payments. You pay for that insurance policy in the form of an additional monthly fee added to your mortgage payment. It's required for all conforming conventional loans with a downpayment under 20%.
What's The Cost of PMI and Do I Have To Pay It Until I Pay Off The Mortgage?
The cost of PMI is determined by the loan-to-value ratio at the time you take out the loan as well as your credit score. The higher your down payment and credit score, the lower your PMI cost. You can figure the monthly cost will be about 1/2 to 1 percent of your loan amount divided by 12. So if you borrow…