What is PMI and how do I avoid it?

PMI is private mortgage insurance, required by lenders when you put down less than 20 percent on a conventional loan. It protects the lender if you default, and typically costs between 0.5 and one percent of the loan amount annually, added to your monthly payment. You can avoid it by putting 20 percent or more down, using a VA loan if you're eligible (no PMI ever), choosing a lender paid mortgage insurance structure where the rate is slightly higher instead, or using a piggyback second mortgage to reach 20 percent equity, though that's less common now. Some loans let you request PMI removal once you reach 20 percent equity through payments or appreciation. The specifics depend on your situation and a licensed lender should confirm your options and costs, and Jon can connect you with one.

Specifics depend on your situation and should be confirmed with a licensed lender. Jon can connect you with one: text (623) 826-0888.