PMI stands for Private Mortgage Insurance, and it is required on mortgages with a loan-to-value ratio greater than 80%. For example, if your home was worth $100k at the time of closing, and you owe more than $80k on the loan, you are required to have PMI.
I got my annual PMI disclosure tonight, and it says that if I’ve had my loan for at least two years, and have a good payment history for at least two years, I am eligible to cancel my PMI.
It’s not a lot, mind you. But I’d love to save the ~$70/mo it costs. That’s a fifth of vodka and a bag of CBD gummies, every month.
I like how I’m analyzing this as if I’ll ever fucking own house or even almost approach being able to produce a down payment for one.
Talk to your local government about any upcoming mortgage grants. Every community I have worked in has some grant that comes out during specific times each year. Usually just a few grand to cover closing costs, but I’ve seen some that cover 20% with a 4 year commitment to not sell the house.
There are also loan programs specifically meant for lower incomes; FHA typically has a higher debt-to-income threshold than conventional loans. Now, I still can’t afford a house even with that, but I have qualified many people who otherwise would not have made it past the Loan Officer.
Thanks for the info
Call your local Habitat for Humanity, go to the next meeting. That’s how I got my mortgage, changed my life forever.
PMI specifically only applies when you don’t have a 20% down payment. If your income is consistent and high enough to qualify you don’t really need to wait until you save up a big down payment.