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KANSAS MORTGAGE GLOSSARY

Private Mortgage Insurance (PMI)

Plain-English definition with Kansas context. Written for homebuyers, not mortgage bankers.

What is PMI?

Private Mortgage Insurance (PMI) is an insurance policy that protects the lender — not the borrower — against default on a conventional loan with less than 20% down. PMI is paid monthly, added to the mortgage payment, and by federal law must be automatically cancelled at 78% LTV based on the original loan schedule.

More detail

PMI differs from FHA’s MIP: PMI cancels at 20% equity; FHA MIP typically stays for the life of the loan unless you put 10% or more down.

Related terms

LTV · conventional · down payment

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