Do USDA Loans Have PMI? Uncovering the Truth

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-What is PMI?

The term “PMI” is an acronym for private mortgage insurance. PMI is insurance that protects the lender in the event that you, the borrower, default on your loan and they are forced to sell the home. In other words, if you can’t pay your mortgage, the lender will get the money back that they loaned to you from the sale of your home, plus any interest that is owed.

You are required to have PMI if you put less than 20% down on a home. The good news is that you can get rid of PMI once you reach 20% equity in your home. You can do this by paying down your mortgage or by the home’s value increasing.

The cost of PMI depends on a few factors:

- The size of your down payment

- The term of your loan

- The type of loan

- The insurance premium

The PMI premium is typically added to your monthly man Progr

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