Private Mortgage Insurance (PMI) and How Paying Per Month Can Reduce PMI Sooner 

Happy Blessed Monday night, Beautiful Ladies,

I hope everyone had a fantastic weekend.  This weekend, I was extremely busy!  Friday night I attended the annual New York Life Gala at the Liberty House in New Jersey.  I ate and danced all night!  On Saturday, even though I was exhausted, I worked a few hours.  Once I finished working, I came home and got ready for my favorite day of the week, doing one of my favorite activities. You guessed it.  Going to church and thanking HIM for another blessed week.

Last week, we spoke about debt to income ratio and what lenders look for, in terms of percentage and outstanding bills.  Today, we will discuss the final part of the series which is Private Mortgage Insurance (PMI) and how paying per month can reduce the PMI sooner.

What is Private Mortgage Insurance?

Private Mortgage Insurance, is a type of mortgage insurance you might be required to pay for if you have a conventional loan (A conventional loan is a loan not backed by a government entity but is backed by private lenders like a bank, credit union or mortgage company).  Like other kinds of mortgage lenders, PMI protects the lender, not you, if you stop making payments on your loan.  Basically, if you are a high risk borrower, the lenders tend to require you to take out Private Mortgage Insurance.

How To Pay Down Your PMI Faster

The easiest, way to get rid of your PMI is by making your mortgage payments on time each month. Once your loan-to-value ratio (LTV – how much you owe vs how much the house is worth) reaches 80 percent, you can contact your lender to begin the process of taking off the PMI.

This will take some time depending on how much money you originally put down on the house. If you put no money down, it’s probably going to take, at the very minimum — several years more than if you put 5 percent or 10 percent down at the time of purchase.

You are aiming for 20 percent equity. Federal law requires mortgage lenders to notify homeowners at closing approximately how long it will take for them to reach the 80 percent loan-to-value assuming they make their regular monthly payments.

If you want to get the PMI off of your loan faster, pay down what you owe quicker by making one extra mortgage payment each year or putting your annual bonus towards your mortgage.

If you have any additional questions or comments, please feel free to comment here or email me at:

This concludes our conversation on home purchasing.

Next Up: Gift Card time….stay tuned

As always, thank you for reading.

Have a beautiful and blessed week,


Changing the lives in our community….one family at a time



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