How can You avoid paying Private Mortgage Insurance (PMI) in Dallas? Private mortgage insurance or PMI is insurance you are required to pay on a home loan in order to protect the lender should you default on your monthly payments. The only benefit is for the lender in that they will lose less money if you can’t make your monthly mortgage payments. PMI costs between 0.5% and 1% of your monthly payments per year. Considering how PMI is beneficial to the lender and hurts your wallet, you may be able to avoid paying it. Banks require a home buyer to pay PMI when the equity in their home is less than 20%. So if you want to buy a home priced at $500k, a down payment of 20% would be $100k. If you only $20k to put down, the lender is going to require you to buy private mortgage insurance until the equity in the home reaches $100k. Or, in other words, you have to pay PMI until the remaining balance on your home loan is $400k. Consequently, the only way to avoid paying PMI is to put down a minimum of 20%. There are some exceptions such as getting a VA mortgage or qualifying for a federal or state mortgage program that doesn’t require paying PMI. New Frontier Financial Inc. 13612 Midway Rd #398 Dallas, Tx 75244 Hours: Monday-Friday 9:00am-4pm https://www.google.com/maps?cid=3253012058675576884