What is private mortgage insurance and can I remove it

Private mortgage insurance (PMI) is a policy that protects your lender if you default on your loan. It's typically required when you put down less than 20% on a conventional mortgage. PMI usually costs between 0.5% and 1.5% of your loan amount annually, added to your monthly payment. You can remove PMI once you reach 20% equity in your home. Under the Homeowners Protection Act, you can request cancellation when your loan balance reaches 80% of the original purchase price. Your lender must automatically cancel it at 78%. You can also reach 20% equity faster by making extra payments, or by requesting a new appraisal if your home's value has increased significantly since purchase.