Private Mortgage Insurance

Private Mortgage Insurance (PMI) is a risk-mitigation policy required by conventional mortgage lenders when a buyer puts down less than 20% of the home’s purchase price (an LTV above 80%). PMI is typically paid as a monthly surcharge added to the mortgage payment. Under federal law, borrowers can request PMI cancellation once loan principal amortizes to 80% of the original home value, and lenders must automatically terminate it at 78% LTV.