Define: PMI

PMI stands for Private Mortgage Insurance. It is a type of insurance that protects the lender in case the borrower defaults on their mortgage payments.

PMI is typically required when the borrower makes a down payment of less than 20% of the home’s purchase price.

The cost of PMI varies depending on factors such as the borrower’s credit score, loan amount, and down payment. On average, PMI can range from 0.5% to 1% of the loan amount per year.

Yes, you can cancel PMI once you have built up enough equity in your home. Generally, this occurs when your loan balance reaches 80% of the home’s original appraised value.

To avoid paying PMI, you can make a down payment of at least 20% of the home’s purchase price. Alternatively, you may consider taking out a piggyback loan or opting for lender-paid mortgage insurance.

In most cases, PMI is not tax-deductible. However, there are certain income limits and exceptions that may allow you to deduct PMI premiums. Consult with a tax professional for specific advice.

No, PMI premiums are non-refundable. However, if you have prepaid your PMI for the year, you may be entitled to a prorated refund for the unused portion.

No, PMI cannot be waived solely based on an increase in your home’s value. You will still need to meet the loan-to-value ratio requirements set by your lender.

In most cases, the lender will select the PMI provider. However, you can request a specific PMI provider if you have a preference.

Yes, refinancing your mortgage can be an option to remove PMI. If your home’s value has increased or you have paid down a significant portion of your loan, refinancing may allow you to obtain a new loan without PMI.