The topic of private mortgage insurance (PMI) is a big one for homeowners and homebuyers alike and there is good reason, namely your wallet. PMI can play an important role for both you and your lender, and making sure you have the right answers is a priority for us.
What is PMI?
PMI is an insurance policy that protects the lender if you are unable to pay your mortgage. It's a monthly fee, rolled into your mortgage payment, that is required for all conforming, conventional loans that have down payments less than 20%. Once you've built equity of 20% in your home, you can cancel your PMI and remove that expense from your mortgage payment.
Top Questions & Answers
As you can imagine, many questions are raised regarding PMI, many of which we've addressed in previous blogs. For this blog, however, we turned to our call center experts. Here are the top two PMI questions of the day:
* If Freddie Mac or Fannie Mae own your loan, it's important to note that you may not be able to cancel PMI if your mortgage is less than two years old — and sometimes up to five. This "seasoning" of your loan is used to assess if your loan has been in good standing for a reasonable amount of time.
Learn more by getting the FYI on PMI.
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