Can I avoid PMI on my loan?

When you buy a house with less than 20% down you may be required to purchase PMI or Private Mortgage Insurance.  Private Mortgage Insurance is a type of guarantee to protect the lenders against foreclosure costs provided by private mortgage insurance companies. Without mortgage insurance, you might not be able to buy a home with less than a 20% down payment.

Your PMI premium is normally added to your monthly mortgage payment.

Equity is not the only deciding factor in removing PMI, your lender has the final say in determining when to cancel your PMI coverage. Some lenders require that you pay PMI for one or two years before you can apply to remove it.

To remove the PMI on your loan, your lender will probably require an appraisal (paid by you) to determine the value of your property. Or, contact your mortgage professional and inquire about refinancing to get out of your PMI payment.

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