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What is PMI?

PMI is short for private mortgage insurance. PMI is insurance required on mortgage loans for borrowers in two specific situations.

If you don’t submit a 20% down payment when purchasing a home, PMI is required.

OR If you don’t have 20% equity in your home when you are refinancing, PMI is required.

PMI is not homeowners insurance. Private Mortgage Insurance actually protects the lender in the instance that you stop making payments on your loan. The cost of PMI is included in your monthly mortgage payment.

You can request to stop PMI once your reach 20% equity in your home.  These requests are evaluated based on your payment history.  PMI is automatically canceled once you reach 78% equity in your home.

It is always a good idea to read your mortgage statement and be aware of the amount of equity you have in your home, since stopping PMI can save you money each month.

Here at Ascentra, members receive letters annually letting them know the percentage of equity in their home. This makes it really easy to track when you can cancel your private mortgage insurance.

At Ascentra, we handle all mortgage servicing in-house.  So if you have questions, we are here for you.  We are your mortgage experts.