The National Directory of Certified Public Accountants

Ask A CPA - Insurance

Is There A Way To Lessen The ( PMI ) Private Mortgage Insurance Amount ?

A borrower pays (PMI) private mortgage insurance to protect the lender in case of payment default. If you have less than 20% to put down on the purchase of a house, you will be charged with PMI insurance. You can reduce the PMI by getting a fixed rate mortgage instead of a variable mortgage. Also the more you put down as a down payment, even if less than the 20%, this will reduce the amount of the PMI. Make sure there is a provision that allows you to stop paying PMI once the loan is less than 80% of the value of the home.

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