What is Private Mortgage Insurance?

By RealtyCrunch IncApril, 28th 2020
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What is Private Mortgage Insurance?

Private mortgage insurance (PMI) is an insurance product for the mortgage lender’s for assuming additional risk by accepting a lower amount of upfront.You can avoid paying PMI by making a 20% down payment.

How much does PMI cost?

The average cost of PMI ranges from 0.55% to 2.25% of the original loan amount.

(I.E. if you have a $250,000 mortgage <> PMI would cost $1,375 to $5,625 per year)

What factors consist of the PMI?

  • Size of the mortgage loan
  • Down payment amount
  • Credit score
  • Type of mortgage (link to ARM or FRM)