PMI Explained: What It Costs and How to Remove It

What Is PMI?

Private Mortgage Insurance protects the lender (not you) when you put less than 20% down on a conventional loan. It typically costs 0.3-1.5% of the loan amount annually.

How Much Does It Cost?

On a $350K home with 5% down ($332,500 loan): PMI is roughly $83-$415/month depending on your credit score and down payment.

How to Remove PMI

Automatic removal: Lender must remove PMI when your balance hits 78% of original value.
Request removal: You can request at 80% LTV with good payment history.
Reappraisal: If your home has appreciated, get a new appraisal to prove 20% equity.

FHA MIP vs PMI

Key difference: FHA MIP stays for the life of the loan. Conventional PMI can be removed. This makes conventional loans cheaper long-term for buyers who start with less than 20% down.