What is private mortgage insurance (PMI)?
Private mortgage insurance (PMI) protects the lender on a conventional loan when the buyer puts down less than 20% of the price.
In practice
- Under the federal Homeowners Protection Act, borrowers can ask to cancel PMI at 80% loan to value, and it ends automatically at 78% on the original schedule if payments are current.
- FHA loans use their own mortgage insurance with different rules.
General information, not legal, tax or financial advice. Rules vary by state and MLS.
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