What is Private Mortgage Insurance?

By RealtyCrunch IncApril, 28th 2020
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)