Private mortgage insurance is a type of insurance required when you purchase a home with less than 20% down. It is included in your monthly mortgage payment and it will be removed once you reach 20% equity in your home.

You can also get a “NO-PMI” loan, but this does not come without cost. Essentially, the PMI is rolled into the cost of the loan, which means your monthly payment will be higher. This is to your disadvantage as this type of PMI is built into the loan for the life of the loan, so it cannot be removed even when you reach 20% equity.