 TITLE: How to Get Rid of Private Mortgage Insurance (PMI) CONTENT: Private mortgage insurance is an insurance policy you may have to purchase when you get a conventional mortgage from a private lender.\nGenerally, you have to have PMI if you put less than 20% down. For example, if you buy a $400,000 home, your down payment will need to be at least $80,000 if you want to avoid PMI. Plus, you'll need to budget for closing costs.\nPrivate mortgage insurance protects private mortgage lenders if a borrower doesn't repay a conventional loan. Sometimes, PMI is confused with mortgage insurance that you may have to pay for with other types of mortgages:\n*   **Mortgage insurance premium (MIP)** protects lenders if a borrower doesn't repay their Federal Housing Administration (FHA) mortgages.\n*   **U.S. Department of Agriculture** **(USDA) loans** require an upfront and monthly premium payment for mortgage insurance.\n*   **Department of Veterans Affairs** **(VA) loans** don't require mortgage insurance, but you may pay an upfront funding fee to get the loan.\nPMI is also different from homeowners insurance, which protects you in case your home or belongings are damaged or stolen. PMI protects the lender.\nOne important distinction is that you can't remove mortgage insurance on mortgages that are government-backed or -issued unless you refinance to a loan that doesn't require mortgage insurance. You can get rid of PMI, however, or get a mortgage from a private lender without PMI if you have a large down payment.\nA PMI policy costs around 0.5% to 2% of the total mortgage. The exact amount can vary depending on your down payment and credit scores. Having good credit can help you qualify for a lower interest rate on your mortgage and lower PMI payments.\nMost borrowers pay the monthly PMI premiums as part of their mortgage payment. But you might have the option to pay the entire amount upfront, or split the cost between upfront and monthly payments.\nSome lenders also offer PMI-free mortgages to borrowers who put less than 20% down. But these have lender-paid private mortgage insurance (LPMI), and the loans often have a higher interest rate. END