PMI (Private Mortgage Insurance)
Required on conventional loans with less than 20% down. Protects the lender — not the borrower. Typically 0.5–1.5% of the loan amount annually, paid monthly. Cancels automatically when LTV reaches 78% by original amortization schedule; you can request cancellation at 80% LTV based on current appraised value.
How does this affect your loan? Estimate self-employed qualifying income with the DTI calculator, or read the self-employed mortgage guide.
Related terms
- Rate premium — The additional interest rate paid for a non-QM loan above the conventional baseline. The premium exists becaus…
- Prepayment penalty — A fee charged if you pay off the loan early — either through a full payoff (refinance or sale) or, on some pro…
- APR (Annual Percentage Rate) — The total cost of a loan including the interest rate, origination fees, discount points, and other lender char…
- Rate lock — A lender commitment to hold a specific interest rate for a set period (typically 30–60 days) while your loan i…
- Points / discount points — Upfront fees paid to the lender to buy down the interest rate. 1 point = 1% of the loan amount. On a $400,000…
← Back to the full mortgage glossary
Sources
Educational definition only — not financial, legal, or tax advice. Programs and limits change; verify current terms with a licensed professional.