What Is PMI Mortgage Insurance?

How PMI Works and What It Costs

PMI attaches to conventional loans when the down payment is under 20% of the purchase price, meaning the loan-to-value ratio starts above 80%. It exists to protect the lender if the borrower defaults. The borrower pays for it anyway, usually as a line on the monthly mortgage payment. Cost typically runs 0.22% to 2.25% of the original loan amount per year. On a $300,000 loan, that can mean roughly $55 to $563 a month depending on credit score, down payment size, and loan type. Borrowers with scores of 740 or higher get the lowest rates; scores below 680 push toward the high end. There are three common structures: borrower-paid monthly PMI (cancelable later), lender-paid PMI (absorbed into a higher interest rate and permanent unless you refinance), and single-premium PMI paid upfront at about 1% to 3% of the loan amount. FHA loans work differently. They charge a mortgage insurance premium (MIP) on every loan regardless of down payment: 1.75% upfront plus 0.45% to 1.05% annually. And if the FHA down payment was under 10%, MIP stays for the life of the loan unless the borrower refinances into a conventional loan.

The Mistake That Keeps Homeowners Paying PMI Longer Than They Should

The Homeowners Protection Act gives PMI two different endpoints, and homeowners routinely confuse them. At 80% loan-to-value, based on the home's original value, you have the right to request cancellation in writing. But only if you ask, and only with a clean payment history: no payments 30 or more days late in the past 12 months and none 60 or more days late in the past 24. Automatic termination does not happen until 78% LTV. The common mistake is assuming PMI falls off on its own at 80% and quietly paying it for the extra time it takes the balance to amortize from 80% down to 78%, which early in a 30-year loan can take a year or more of regular payments. Lenders must send an annual reminder of your cancellation rights, but they will not initiate the 80% cancellation for you. If your home's value has risen, which many Florida markets have seen in recent years, ask your servicer whether a new appraisal can be used to show you have crossed the threshold sooner. Servicers set their own rules for using current value instead of original value, so put the request in writing. The worst answer is no.

What PMI Means When You Sell Your Florida Home

Two things Florida sellers should know. First, PMI never blocks a sale. When you sell, the loan is paid off at closing and the PMI obligation ends with it. You do not need 20% equity to sell, and there is no PMI penalty for selling while it is still on the loan. Second, PMI is the reason many of today's strongest buyers can perform. A buyer putting 5% or 10% down on a conventional loan, or 3.5% down on FHA, has been fully underwritten on income, credit, and appraisal, and mortgage insurance is what lets the lender approve that file. A financed buyer with a modest down payment is not a weaker buyer. That buyer is the market. It is also the buyer pool Cash Flow Deals works with every week. Cash Flow Deals is a Florida real estate investor that connects homeowners directly to vetted FHA, conventional, VA, and DSCR buyers through a novation agreement: one contract, the buyer purchases the home directly from you, and Cash Flow Deals is paid as a flat, transparent line-item fee on the settlement statement. Listing-side details run through Silver Door Realty, a licensed Florida brokerage, so the sale closes the standard way without the drawn-out open-market process.

Cash Flow Deals is a Florida real estate investor that locks in a net price for a seller's house before repairs are scoped, using a novation-based, flat-fee process arranged through its licensed FL brokerage partner, Silver Door Realty — not a traditional listing, and not a brokerage itself.

Here's what working with Cash Flow Deals actually 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. Cash Flow Deals matches your home to a vetted, financed FHA, conventional, VA, or DSCR buyer and locks in your net price before any repairs are scoped, so PMI, appraisal gaps, or repair costs don't change what you walk away with.

3. The sale closes through the novation contract and Silver Door Realty's licensed brokerage process, with funds available in as little as 10 business days.