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If you put less than 20% down on a home, you're required to pay Private Mortgage Insurance (PMI). This is to protect the bank that you're lending from in case you cannot pay off a mortgage.
To stop paying PMI each month, you have to look at the type of loan that you have. If you have a conventional loan, you have to wait two years until you can get rid of it. If you have a FHA loan with only 10% down, then you have to wait 11 years. If you used an FHA loan and put down the standard 3.5%, you won't ever be able to get rid of PMI until you refinance.
Let's assume that you have an FHA loan and you put 10% down and you've waited your eleven years. What you need to do next is pay down the loan by at least 22%, and then you will no longer have to pay PMI. Another alternative would be if your home appraises at a value that is 20% higher than when you bought it. This is not a regular appraisal. The bank has to run a special appraisal, and if they find the value to have improved, you can then get rid of your PMI.
PMI payments can add up and cost you a lot of money over the course of your loan. If possible, I would recommend doing anything necessary to get rid of them. If you need assistance when doing this, please don't hesitate to contact me!
