What is PMI?
PMI stands for private mortgage insurance and it is required by most lenders when you are getting a loan and cannot put at least 20% down on the purchase price of the home. Private mortgage insurance protects the lender in the event that you default on the loan.
There are several loan programs available for first time homebuyers that allow the buyer to get 100% financing. So, don't be surprised if your montly payment is more than your mortgage calculator estimated. Any lender will be able to give you a good faith estimate and let you know what kind of PMI charges you will likely incur so you are not surprised at closing. You may need to spend less money on your first home in order to keep your monthly payments lower if you get a 100% financed loan.
For more detailed information, click here to check out the information available on The Federal Trade Commission's website.