If you bought your home with less than 20% down, you are most likely paying private mortgage insurance (PMI). Most borrowers can’t wait to get to 22% equity when their PMI will be cancelled.
One way to stop paying PMI is through refinancing your home. Now this likely won’t be an inexpensive way to avoid PMI in terms of closing costs involved with refinancing. So you may want to have other reasons to refinance such as a lower monthly payment or getting cash-out as well. If you’re equity has increased a good deal recently so that you have more than 20% equity then you could avoid PMI through this route as well – you’ll still have to pay for an appraisal but that will be a lot less than the closing costs.
