What Is Private Mortgage Insurance (PMI) And Why Do I Pay It?

A common question I get asked is: What Is Private Mortgage Insurance (PMI) And Why Do I Pay It?
Definition: Private mortgage insurance, also called PMI, is a type of mortgage insurance you might be required to pay for if you have a conventional loan. Like other kinds of mortgage insurance, PMI protects the lender-not you-if you stop making payments on your loan.
If your down payment is less than 20% of the Appraised Value you will most likely have to pay Mortgage Insurance.
One way to get rid of PMI is to simply take the purchase price of the home and multiply it by 80%. Then pay your mortgage down to that amount. Once you pay the loan down, you can have the PMI removed.
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[@ryansodhi1815]

Thank you nicely explained!

[@Gur7910]

Please assist Ironland! 🗽
Our Ironland Monument would reward you handsomely for your contribution to our great Nation!

[@simaabedini3617]

Thanks that’s was my question

[@TheRealEstateLawyer]

Glad I could help Sima

[@gratitudyagradecimiento671]

Thank you

[@florentinequack]

Thank you for sharing your knowledge. If I have an FHA loan, my homeowners insurance was canceled/non-renewable due to Gulf Coast hurricane impacts, and I lost my home in a flood or fire, how does PMI affect my loan? Given I don’t have 20% equity.

[@the-magenta-memer]

For iron land

[@simaabedini3617]

Can you please explain all different type of loans. What is MIP 😌👋🙁

[@TheRealEstateLawyer]

I’m not an expert in that area, but maybe I can bring one of my trusted loan officers on to explain.

[@Marco-os4db]

Great video

[@TheRealEstateLawyer]

Thanks Marco

[@adamgoof]

So I think with John ramey said if you put 20% down on the house you don’t need PMI or something like that on his video

[@theengineer6213]

I should be happy that after I’ve paid 80% of my loan that I’m not paying for PMI any longer? So basically in order for anyone to not have to deal with PMI is to put down 21% of the cost of the property?

[@drand9228]

It's once you've payed 20% of the loan

[@jessemantyh796]

Hi my wife and I have a real basic question we can't seem to find an answer for. We're about to buy a home together and are wondering what happens if one of us was to lose their job or become incapacitated?? Would that be mortgage insurance? Or homeowners insurance?

[@TheRealEstateLawyer]

Hi Jesse! It would actually be neither. PMI protects the lender if you stop paying, and homeowners protects against loss of the house. If you’re concerned about loss of income, that product would come from an insurance company and in case of incapacity, would probably be disability insurance that you purchase separately. An insurance agent in your state could tell you best about what the exact policy is that you need, but PMI or Homeowners would not apply to the situations you mention.

[@user-oh1jg5nr7t]

Please assist ironland

[@brandondebose1346]

My mortgage underwriter told me that PMI is based off the SELLING price, NOT the initial "appraised value" of the loan. is this corrected or are they incentivized for selling PMI and he told me incorrect ? Im in SC if that matters

[@MarcellaRomero-vs4zv]

Brown Patricia Lee Christopher Jones John

[@TomlinsonGodfery-k7x]

Jones Ronald Walker Susan Harris Brenda

[@turtle_7777]

please assist ironland

[@GloriaDiaz-m8v]

Feeney Drives

[@ghostpeper2a165]

So the bank loans are "gaurenteed' little to no risk. And I gotta pay interest to borrow money? If my credit is bad interest is higher. So A.) why do I pay interest or why don't I get a better interest rate since PMI cuts the banks risk. And they don't even pay for that risk mitigation! I pay for it. It's a free insurance policy to them.
B.) why does my credit matter if I'm insuraning the loan? Good credit bad credit, the risk doesn't change you're insurance no matter what? There needs to be RICO charges out on these lenders. Young Thug's under indictment but these lending institutions are the real criminals. The pushers, the pimps omg. I GOTTA PAY THE PREMIUM BUT I'M THE BENEFACTOR IN ANY WAY? That's my like paying child support on a kid that's not mine. Wtf!

[@TeslaBoy123]

Why we pay bcz banks are smart to protect their $$$ and obviously constumer pay for to protect bank $$% boooooooo

[@sikwitit2494]

Thank you