PMI stands for Private Mortgage Insurance, and it is required on mortgages with a loan-to-value ratio greater than 80%. For example, if your home was worth $100k at the time of closing, and you owe more than $80k on the loan, you are required to have PMI.
I got my annual PMI disclosure tonight, and it says that if I’ve had my loan for at least two years, and have a good payment history for at least two years, I am eligible to cancel my PMI.
It’s not a lot, mind you. But I’d love to save the ~$70/mo it costs. That’s a fifth of vodka and a bag of CBD gummies, every month.
Yes, because presumably you’ve shifted that balance of loan to value significantly enough that you’re much less of a risk. You have. A lot more skin in the game after 2 years.
the first like 10 years of payments is mostly against the amortized interest, so in the first 2 years the principal owed barely moves down.
Which is why on a 30 year home loan, even adding an extra $150 a month to paying your principal down will literally shave a decades worth of payments off.
Yes, money you will completely lose if you default.
What, the interest? You lose that money, default or not.
The value you can get from selling it down the line will more than cover that interest. You only really fuck yourself with that cost if you see the mortgage through to maturity.