Once you’ve purchased a home and obtained a conventional loan, you’ll be required to pay private mortgage insurance (PMI) until you’ve accumulated a certain amount of equity in the property. The good news is that you don’t have to keep making these payments forever. Here’s what you need to know about how long you have to pay mortgage insurance:
You can typically request to stop PMI payments once you’ve built up 20 percent equity in your home.
If you don’t request to stop the payments, the lender is required to automatically remove PMI when you’ve reached 22 percent equity.
Keep in mind that PMI is only required for conventional loans. Other types of loans, such as FHA loans, have their own unique forms of mortgage insurance that may have different requirements and timelines.
By understanding the rules surrounding PMI payments, you can plan accordingly and take steps to reduce or eliminate this extra expense.
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