What Is PMI Mortgage Insurance?

How PMI Works and What It Costs

PMI kicks in on conventional loans the moment your down payment falls under 20% of the purchase price. That puts your loan-to-value ratio above 80%. Its whole job: protect the lender if you default. You foot the bill anyway, as a line item on your monthly payment. Expect 0.22% to 2.25% of the original loan amount per year. On a $300,000 loan, that's roughly $55 to $563 a month, depending on your credit score, down payment, and loan type. Score 740 or higher and you land at the low end. Below 680, you pay the high end. Three structures exist. Borrower-paid monthly PMI, which you can cancel later. Lender-paid PMI, baked into a higher interest rate and permanent unless you refinance. Single-premium PMI, paid upfront at 1% to 3% of the loan amount. FHA loans play by different rules. Every FHA loan carries a mortgage insurance premium (MIP), no matter the down payment: 1.75% upfront, plus 0.45% to 1.05% annually. Put down less than 10% on an FHA loan and MIP sticks around for the life of the loan. Your only way out is refinancing into a conventional loan.

The Mistake That Keeps Homeowners Paying PMI Longer Than They Should

The Homeowners Protection Act sets two different PMI endpoints, and most homeowners mix them up. At 80% loan-to-value, measured against your home's original value, you can request cancellation in writing. Key word: request. You have to ask, and you need a clean payment history: no payments 30 or more days late in the past 12 months, none 60 or more days late in the past 24. Automatic termination doesn't happen until 78% LTV. Here's the mistake: people assume PMI drops off on its own at 80% and keep paying it while the balance slowly amortizes down to 78%, which early in a 30-year loan can eat up a year or more of payments. Lenders are required to send an annual reminder of your cancellation rights, but they will not request the 80% cancellation for you. That's on you. If your home's value has climbed, and plenty of Florida markets have seen that in recent years, ask your servicer whether a new appraisal can prove you've already crossed the threshold. Servicers set their own rules on using current value instead of original value, so put the request in writing. The worst thing they can say is no.

What PMI Means When You Sell Your Florida Home

Two things Florida sellers need to know. First: PMI never blocks a sale. Sell the house, and the loan gets paid off at closing, taking the PMI obligation with it. You don't need 20% equity to sell, and there's no PMI penalty for selling before you reach it. Second: mortgage insurance helps buyers qualify with smaller down payments. A buyer putting down 5% or 10% on a conventional loan, or 3.5% on FHA, can qualify subject to the lender's income, credit, property, and appraisal requirements. A modest down payment alone doesn't make a financed buyer weaker. It's also the buyer pool Cash Flow Deals works with every week.

With Cash Flow Deals, you choose between the Fast Cash Offer, where we buy your house as-is and close, and the Premium Cash Offer, where a pre-approved FHA or conventional buyer we already have, ready to go, pays more and buys directly from you. Cash Flow Deals is a Florida real estate investor. On the Premium path, your home may be listed through Silver Door Realty, a licensed Florida brokerage, with a licensed agent and scheduled showings. Your buyer signs a new contract directly with you, title transfers directly to that buyer, and their lender funds the purchase. We are paid as a separate, transparent line item on the closing statement.

For either offer, the number is agreed before any work starts, and it changes only if you agree. The one exception: if something structural surfaces that was not visible or disclosed before we signed — foundation issues, hidden moisture, old wiring, cast-iron drain failure — we re-cost it and bring the number back to you. You decide. You can walk away. We disclose what we know at offer time so this almost never happens. We cover repair costs, and we figure out a way, so nothing comes out of your pocket. On Premium, only what the buyer's lender requires gets fixed, with repair costs settled from the sale proceeds out of our share. On Fast Cash, we buy as-is, with no repairs for you to make.

Here's what working with Cash Flow Deals looks like, step by step:

1. Share your address and mortgage details, including where you stand with PMI or FHA's MIP, with Cash Flow Deals for a free property review. Most sellers hear back within 24 hours.

2. Compare your Fast Cash Offer and Premium Cash Offer and choose which fits your needs. Before any work starts, you agree to your number, and it changes only if you agree. The one exception: if something structural surfaces that was not visible or disclosed before we signed — foundation issues, hidden moisture, old wiring, cast-iron drain failure — we re-cost it and bring the number back to you. You decide. You can walk away. We disclose what we know at offer time so this almost never happens.

3. You help pick the closing date. The existing closing window is 45 days or less, subject to your chosen offer's written terms and any lender requirements. With the Premium Cash Offer, if the buyer's loan falls through, that is our problem, not yours, and you can still take the Fast Cash Offer at its own number.