Mortgage insurance protects the lender, not you, if you put down less than 20% on many loans. It adds to your monthly cost.
Good to know
- On conventional loans it's called private mortgage insurance (PMI)
- Under federal law, you can generally ask to cancel PMI when your balance reaches 80% of the home's original value, and it ends automatically at 78% if you're current
- FHA loans have their own mortgage insurance premium with different rules
- Ask your lender for the PMI cost in your Loan Estimate
Rules vary by loan type. Check with your lender and ConsumerFinance.gov. Save More Haven isn't paid by any lender, broker or real estate agent.