Mortgage Insurance (PMI) is required whenever you make less
than a 20% down payment. The smaller the amount of down payment,
the greater the amount of insurance required. Mortgage insurance
is paid monthly, and is included in your monthly payment in
the same fashion as property insurance and taxes.
Decrease your PMI costs by increasing your down payment. Additionally,
when the balance of your loan decreases to 80% or less of
the appraised value of the home, the mortgage holder may,
at your request, waive the requirement for the insurance.
Your loan balance can decrease to 80% of your home's appraised
value in three ways:
- Normal monthly
payments which reduce the loan balance you owe.
- Extra payments
which further reduce the balance owed.
- Appreciation of
the property's market value.