![]() You can request to remove PMI once you acquire 20% equity. The higher the loan you take than the home's value, the higher the PMI and vice versa. LTV is indicative of how much equity you already have tied into the property. Most private insurers will not insure a FICO credit score of less than 620.ĭown payment: Down payment determines the loan-to-value ratio (LTV). A low credit score means you'll need to commit to paying a higher PMI premium as inducement for your loan and insurance policy to be approved. PMI premium rates usually range from 0.5% to 3% of the original loan amount per year.Ĭredit score: Credit scores predict credit delinquency. The PMI rates are the percentage of your loan that you pay as an insurance premium. Notwithstanding, the lower your creditworthiness or down payment, the more risk the lender takes, and the higher the private mortgage insurance you'll pay. It's advisable to pay in installments because PMI is not always refundable when you stop holding the mortgage, in case you decide to move or refinance your mortgage. ![]() PMI is not tax-deductible, so consider which option best suits you when planning your payments in addition to your mortgage loan, interest, and taxes.
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