How Much Is PMI (Private Mortgage Insurance)? What You Need to Know

PMI is an insurance policy for the lender in case you stop making your monthly payments.

How Much Is PMI (Private Mortgage Insurance)? What You Need to Know

As stated above, PMI is essentially an additional payment as part of your mortgage that acts as insurance for the lender of a mortgage if the borrower stops paying back their loan.

What Is PMI?

When Is PMI Required?

PMI may be required when you’re purchasing a house or refinancing your mortgage.

If you do need to pay PMI, your lender, not you, will choose the provider of the PMI. In most cases, you won’t know the provider as you make the payment directly to your lender, and they will pass the PMI portion along to the PMI provider.

Who Provides PMI?

When Do You Pay PMI?

PMI payments can be paid in a few ways depending on PMI type (more on that below). Your lender may let you choose how you pay your PMI, and others will make that decision for you.

When paying PMI, there are several ways you can do it. 

Types of Private Mortgage Insurance (PMI)

How To Calculate Your PMI Cost

The first step in calculating PMI is to determine if you’ll need to pay it in the first place. Take your down payment, divide it by the home’s purchase price, then multiply by 100.

The factors above will generally give you a good idea of how much PMI you’ll be paying for any particular situation. Still, other factors can affect your PMI payment amount as well.

Other Factors for PMI