Private Mortgage Insurance (PMI) is the money you pay each month on a mortgage loan to cover the lender's cost if you default on the loan. If you have put a 20% down payment you will not need to pay PMI. VA loans do not require a down payment or PMI. The loan is guaranteed by the government. USDA loans buyers to pay PMI if they have not put down 20%. They also require a 1% upfront PMI and a monthly .35%. To determine the PMI multiply your loan amount by the PMI percentage and divide the total by 12.
Example: If you are buying a home for $250,000 and PMI is .80%, multiply 250,000 X .008 that equals $2000. Now divide the 2000 by 12. This gives you a monthly payment of $166.66
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