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Citi’s offerings and lending guidelines may differ.","content:disclosures:global-floating-disclosure.json","Global Floating Disclosure","disclosures/global-floating-disclosure.json",{"title":91,"subtext":7,"portraitImage":92,"imageAlt":93,"imageWidth":94,"background":95,"borderRadius":96,"maxWidth":97,"paddingTopBottom":98,"paddingLeftRight":98,"gap":98,"variant":99},"Citi is #1 in Customer Satisfaction with Mortgage Origination - ***[J.D. Power 2025 Award](https://www.jdpower.com/business/awards)***","/media/jdpower-trophy.png","J.D. Power 2025 Trophy",48,"var(--brand-default)",0,650,16,"default",{"data":101,"body":103,"excerpt":-1,"toc":178},{"title":7,"description":102},"Key insights: ",{"type":104,"children":105},"root",[106,120,140,168,173],{"type":107,"tag":108,"props":109,"children":110},"element","p",{},[111,118],{"type":107,"tag":112,"props":113,"children":114},"strong",{},[115],{"type":116,"value":117},"text","Key insights:",{"type":116,"value":119}," ",{"type":107,"tag":121,"props":122,"children":123},"ul",{},[124,130,135],{"type":107,"tag":125,"props":126,"children":127},"li",{},[128],{"type":116,"value":129},"Mortgage insurance protects the lender when the buyer makes a down payment less than 20 percent of the purchase price of the home",{"type":107,"tag":125,"props":131,"children":132},{},[133],{"type":116,"value":134},"The cost of mortgage insurance depends on details like the type of mortgage you have, your credit, your down payment, your loan amount and your loan term",{"type":107,"tag":125,"props":136,"children":137},{},[138],{"type":116,"value":139},"You may pay for mortgage insurance as part of your monthly mortgage payment, upfront or a combination of both",{"type":107,"tag":108,"props":141,"children":142},{},[143,150,152,158,160,166],{"type":107,"tag":144,"props":145,"children":147},"a",{"href":146},"/home-buying/articles/mortgage-insurance/",[148],{"type":116,"value":149},"Mortgage insurance",{"type":116,"value":151}," is one of those costs that often flies under the radar until it shows up in your monthly payment. For many first-time home buyers, especially, it can feel like another entry on an already long list of expenses that includes a ",{"type":107,"tag":144,"props":153,"children":155},{"href":154},"/home-buying/articles/how-much-money-do-you-need-to-buy-a-house/",[156],{"type":116,"value":157},"down payment",{"type":116,"value":159},", ",{"type":107,"tag":144,"props":161,"children":163},{"href":162},"/home-buying/articles/closing-costs/",[164],{"type":116,"value":165},"closing costs",{"type":116,"value":167}," and moving expenses.",{"type":107,"tag":108,"props":169,"children":170},{},[171],{"type":116,"value":172},"But mortgage insurance is a common part of homeownership and, for many people, it’s what makes buying a home possible sooner rather than later. Mortgage insurance helps lenders manage risk when buyers put a down payment less than 20 percent of the home’s purchase price, which in turn opens the door to more flexible home financing options.",{"type":107,"tag":108,"props":174,"children":175},{},[176],{"type":116,"value":177},"If you’re wondering about mortgage insurance cost, how it’s calculated or how long you’ll need to pay it, you’re not alone. This guide explains how mortgage insurance works, what affects the cost and what you can do over time to reduce or remove it.",{"title":7,"searchDepth":179,"depth":179,"links":180},2,[],{"data":182,"body":183,"excerpt":-1,"toc":397},{"title":7,"description":7},{"type":104,"children":184},[185,192,199,218,223,229,240,245,250,255,261,266,299,305,310,316,329,335,345,351,356,362,367,373,386,392],{"type":107,"tag":186,"props":187,"children":191},"callout",{":media":188,"body":189,"title":190},"{\"landscape\":\"/media/article-callout-landscape.png\",\"portrait\":\"/media/article-callout-portrait.jpg\"}","Mortgage insurance doesn’t come with a single, fixed price tag. The cost depends on the type of loan you choose and a few key details about your financial picture.","How much does mortgage insurance cost? ",[],{"type":107,"tag":193,"props":194,"children":196},"h3",{"id":195},"private-mortgage-insurancepmi-on-conventional-loans",[197],{"type":116,"value":198},"Private mortgage insurance (PMI) on conventional loans",{"type":107,"tag":108,"props":200,"children":201},{},[202,208,210,216],{"type":107,"tag":144,"props":203,"children":205},{"href":204},"/home-buying/articles/pmi-home-loan/",[206],{"type":116,"value":207},"PMI",{"type":116,"value":209}," applies to ",{"type":107,"tag":144,"props":211,"children":213},{"href":212},"/home-loans/conventional-loan/",[214],{"type":116,"value":215},"conventional loans",{"type":116,"value":217}," when the down payment is less than 20%. The cost is commonly expressed as an annual percentage of the loan amount (often around 0.5% to 1.5% per year), and it’s paid monthly as part of your mortgage payment.",{"type":107,"tag":108,"props":219,"children":220},{},[221],{"type":116,"value":222},"Where you land within that range depends on things like your credit profile, how much you put down and how the loan is structured. In general, a higher down payment or stronger credit characteristics can help keep PMI costs lower, while a smaller down payment may increase them.",{"type":107,"tag":193,"props":224,"children":226},{"id":225},"fhamortgage-insurance-premiumsmip",[227],{"type":116,"value":228},"FHA mortgage insurance premiums (MIP) ",{"type":107,"tag":108,"props":230,"children":231},{},[232,238],{"type":107,"tag":144,"props":233,"children":235},{"href":234},"/home-loans/fha-loan/",[236],{"type":116,"value":237},"FHA ",{"type":116,"value":239},"mortgage insurance is set up a little differently. Instead of a single monthly charge, it comes in two parts.",{"type":107,"tag":108,"props":241,"children":242},{},[243],{"type":116,"value":244},"First, there’s an upfront mortgage insurance premium. This is a one-time cost, which is typically 1.75% of the loan amount. Many buyers don’t pay this premium in cash at closing. Instead, it’s often rolled into the loan balance and spread out over time.",{"type":107,"tag":108,"props":246,"children":247},{},[248],{"type":116,"value":249},"There’s also an annual mortgage insurance premium, which is an ongoing cost that’s paid monthly as part of your mortgage payment. The amount you pay will vary depending on factors like the size of the loan, how much equity you have in the home and the length of the loan term.",{"type":107,"tag":108,"props":251,"children":252},{},[253],{"type":116,"value":254},"Together, these two premiums make FHA loans possible for many buyers who may not qualify for other loan types (especially those with smaller down payments).",{"type":107,"tag":193,"props":256,"children":258},{"id":257},"how-mortgage-insurance-is-paid",[259],{"type":116,"value":260},"How mortgage insurance is paid",{"type":107,"tag":108,"props":262,"children":263},{},[264],{"type":116,"value":265},"No matter which type of loan you choose, mortgage insurance is paid in one of a few ways:",{"type":107,"tag":121,"props":267,"children":268},{},[269,279,289],{"type":107,"tag":125,"props":270,"children":271},{},[272,277],{"type":107,"tag":112,"props":273,"children":274},{},[275],{"type":116,"value":276},"Added to your monthly mortgage payment:",{"type":116,"value":278}," This is the most common option. Mortgage insurance is bundled in with principal, interest, taxes and homeowners insurance, so everything shows up in one predictable monthly payment.",{"type":107,"tag":125,"props":280,"children":281},{},[282,287],{"type":107,"tag":112,"props":283,"children":284},{},[285],{"type":116,"value":286},"Paid upfront at closing:",{"type":116,"value":288}," In some cases, mortgage insurance may be paid upfront. Many buyers don’t choose this; instead, the cost is often rolled into the loan and spread out over time.",{"type":107,"tag":125,"props":290,"children":291},{},[292,297],{"type":107,"tag":112,"props":293,"children":294},{},[295],{"type":116,"value":296},"Split between upfront and monthly payments:",{"type":116,"value":298}," With this option, part of the cost is paid upfront and the rest is added to the monthly payment. This can help lower the monthly amount without requiring a large one-time expense.",{"type":107,"tag":193,"props":300,"children":302},{"id":301},"what-affectsmortgage-insurance-cost",[303],{"type":116,"value":304},"What affects mortgage insurance cost? ",{"type":107,"tag":108,"props":306,"children":307},{},[308],{"type":116,"value":309},"A few key details shape how much mortgage insurance you’ll pay: ",{"type":107,"tag":193,"props":311,"children":313},{"id":312},"your-credit-profile",[314],{"type":116,"value":315},"Your credit profile ",{"type":107,"tag":108,"props":317,"children":318},{},[319,321,327],{"type":116,"value":320},"Lenders look at your overall ",{"type":107,"tag":144,"props":322,"children":324},{"href":323},"/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house/",[325],{"type":116,"value":326},"creditworthiness",{"type":116,"value":328}," to assess risk. For example, two buyers with the same loan amount may pay different mortgage insurance costs if one has a higher credit score than the other. The buyer with stronger credit typically pays less each month for mortgage insurance.",{"type":107,"tag":193,"props":330,"children":332},{"id":331},"your-down-payment",[333],{"type":116,"value":334},"Your down payment",{"type":107,"tag":108,"props":336,"children":337},{},[338,343],{"type":107,"tag":144,"props":339,"children":340},{"href":154},[341],{"type":116,"value":342},"How much you put down",{"type":116,"value":344}," matters, and even a small change can help. For instance, a buyer\nwho puts down 5% may pay more in mortgage insurance each month than someone who puts down 10% on a home of the same price. Over time, that difference can add up, which is why increasing your down payment, even slightly, can reduce ongoing costs.",{"type":107,"tag":193,"props":346,"children":348},{"id":347},"your-loan-amount",[349],{"type":116,"value":350},"Your loan amount",{"type":107,"tag":108,"props":352,"children":353},{},[354],{"type":116,"value":355},"Mortgage insurance is tied to how much you borrow. A buyer with a $400,000 loan will generally pay more for mortgage insurance than someone with a $250,000 loan, simply because the insured amount is higher.",{"type":107,"tag":193,"props":357,"children":359},{"id":358},"your-loan-to-value-ratio-ltv",[360],{"type":116,"value":361},"Your loan-to-value ratio (LTV)",{"type":107,"tag":108,"props":363,"children":364},{},[365],{"type":116,"value":366},"LTV is a way of comparing how much you’re borrowing to how much the home is worth. If you’re borrowing most of the purchase price, you’ll usually pay more for mortgage insurance. If you start out with more equity (or build it over time by paying down your loan), mortgage insurance costs can go down or, in some cases, be removed altogether, depending on the type of loan.",{"type":107,"tag":193,"props":368,"children":370},{"id":369},"your-loan-program",[371],{"type":116,"value":372},"Your loan program",{"type":107,"tag":108,"props":374,"children":375},{},[376,378,384],{"type":116,"value":377},"Different ",{"type":107,"tag":144,"props":379,"children":381},{"href":380},"/home-loans/articles/types-of-loans/",[382],{"type":116,"value":383},"loan types",{"type":116,"value":385}," handle mortgage insurance in different ways. For example, conventional loans often allow mortgage insurance to be removed once you’ve built enough equity, while FHA loans follow different rules and may require mortgage insurance for the life of the loan, depending on how much you put down.",{"type":107,"tag":193,"props":387,"children":389},{"id":388},"your-loan-term",[390],{"type":116,"value":391},"Your loan term",{"type":107,"tag":108,"props":393,"children":394},{},[395],{"type":116,"value":396},"The length of your loan can influence how mortgage insurance shows up in your payments. With a longer loan term, mortgage insurance is typically paid over more years, which can mean lower monthly costs but more paid over time. A shorter loan term may result in higher monthly payments overall, but you could pay mortgage insurance for fewer years.",{"title":7,"searchDepth":179,"depth":179,"links":398},[399,401,402,403,404,405,406,407,408,409],{"id":195,"depth":400,"text":198},3,{"id":225,"depth":400,"text":228},{"id":257,"depth":400,"text":260},{"id":301,"depth":400,"text":304},{"id":312,"depth":400,"text":315},{"id":331,"depth":400,"text":334},{"id":347,"depth":400,"text":350},{"id":358,"depth":400,"text":361},{"id":369,"depth":400,"text":372},{"id":388,"depth":400,"text":391},{"data":411,"body":413,"excerpt":-1,"toc":518},{"title":7,"description":412},"Mortgage insurance doesn’t have to be a forever cost. As your finances evolve, there may be opportunities to lower it or remove it altogether. Many buyers take small, manageable steps over time that can make a real difference.",{"type":104,"children":414},[415,419,425,430,436,441,447,481,488,494,499,505],{"type":107,"tag":108,"props":416,"children":417},{},[418],{"type":116,"value":412},{"type":107,"tag":193,"props":420,"children":422},{"id":421},"strengthen-your-credit-when-you-can",[423],{"type":116,"value":424},"Strengthen your credit when you can",{"type":107,"tag":108,"props":426,"children":427},{},[428],{"type":116,"value":429},"Improving your credit profile before applying for a mortgage can help reduce mortgage\ninsurance costs. 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Some buyers prefer\n",{"type":107,"tag":144,"props":453,"children":454},{"href":212},[455],{"type":116,"value":215},{"type":116,"value":457},", where mortgage insurance may be removed once enough equity\nis built. Others may choose ",{"type":107,"tag":144,"props":459,"children":460},{"href":234},[461],{"type":116,"value":462},"FHA loans",{"type":116,"value":464}," for their more flexible requirements.\nOptions like ",{"type":107,"tag":144,"props":466,"children":468},{"href":467},"/home-loans/home-run/",[469],{"type":116,"value":470},"HomeRun®",{"type":116,"value":472}," or ",{"type":107,"tag":144,"props":474,"children":476},{"href":475},"/home-loans/home-ready-home-possible/",[477],{"type":116,"value":478},"HomeReady®",{"type":116,"value":480}," loans are designed to support buyers with\nlower down payments while still offering a clear path forward.",{"type":107,"tag":482,"props":483,"children":487},"tip",{"icon":484,"text":485,"title":486},"Bulb","You can see if your address is eligible for the HomeReady® $2,500 credit toward a down payment or closing costs using  [Fannie Mae’s area median look-up tool](https://ami-lookup-tool.fanniemae.com/).","PRO TIP:",[],{"type":107,"tag":193,"props":489,"children":491},{"id":490},"try-to-avoid-stacking-too-many-risk-factors",[492],{"type":116,"value":493},"Try to avoid stacking too many risk factors",{"type":107,"tag":108,"props":495,"children":496},{},[497],{"type":116,"value":498},"When several factors come together, like a smaller down payment and a weaker credit profile, mortgage insurance costs can be higher. Improving just one area can sometimes help balance out another.",{"type":107,"tag":193,"props":500,"children":502},{"id":501},"revisit-your-loan-as-equity-grows",[503],{"type":116,"value":504},"Revisit your loan as equity grows",{"type":107,"tag":108,"props":506,"children":507},{},[508,510,516],{"type":116,"value":509},"As you pay down your mortgage or your home’s value increases, ",{"type":107,"tag":144,"props":511,"children":513},{"href":512},"/refinancing/",[514],{"type":116,"value":515},"refinancing",{"type":116,"value":517}," into a loan without mortgage insurance may become an option. Many homeowners check in on this once they’ve built meaningful equity over time.",{"title":7,"searchDepth":179,"depth":179,"links":519},[520,521,522,523,524],{"id":421,"depth":400,"text":424},{"id":432,"depth":400,"text":435},{"id":443,"depth":400,"text":446},{"id":490,"depth":400,"text":493},{"id":501,"depth":400,"text":504},{"data":526,"body":528,"excerpt":-1,"toc":534},{"title":7,"description":527},"Mortgage insurance often sounds more intimidating than it really is. For many buyers, it’s part of the path to homeownership, especially when saving for a larger down payment isn’t realistic. Mortgage insurance costs can change over time, and in many cases, they aren’t permanent. As you build equity, strengthen your credit or revisit your loan options, there may be opportunities to reduce or remove that cost down the road.",{"type":104,"children":529},[530],{"type":107,"tag":108,"props":531,"children":532},{},[533],{"type":116,"value":527},{"title":7,"searchDepth":179,"depth":179,"links":535},[],{"data":537,"body":538,"excerpt":-1,"toc":546},{"title":7,"description":7},{"type":104,"children":539},[540],{"type":107,"tag":541,"props":542,"children":545},"faq",{":faqs":543,"headline":544},"[{\"question\":\"What determines mortgage insurance cost?\",\"answer\":\"Mortgage insurance cost depends on several factors, including your credit profile, down payment amount, loan size, loan-to-value ratio and the type of loan you choose. Different loan programs calculate mortgage insurance in different ways.\"},{\"question\":\"How much does mortgage insurance cost per month?\",\"answer\":\"Mortgage insurance is usually paid monthly and varies by loan type. For conventional loans, it’s often a small percentage of the loan amount spread across monthly payments. FHA loans calculate mortgage insurance differently and include both upfront and ongoing costs. \"},{\"question\":\"Is my mortgage insurance cost included in my mortgage payment?\",\"answer\":\"While mortgage insurance is not part of your loan, in most cases, mortgage insurance cost can be included in your monthly mortgage payment along with principal, interest, property taxes and homeowners insurance. This makes it part of one predictable monthly amount.\"},{\"question\":\"Does mortgage insurance cost ever go away?\",\"answer\":\"Your mortgage insurance cost may be reduced or removed over time, depending on the loan type. Some conventional loans allow mortgage insurance to be removed once enough equity is built, while other loan programs follow different rules.\"}]","Mortgage insurance cost FAQs",[],{"title":7,"searchDepth":179,"depth":179,"links":547},[],{"data":549,"body":550,"toc":556},{"title":7,"description":86},{"type":104,"children":551},[552],{"type":107,"tag":108,"props":553,"children":554},{},[555],{"type":116,"value":86},{"title":7,"searchDepth":179,"depth":179,"links":557},[],{"data":559,"body":561,"toc":567},{"title":7,"description":560},"Citi is #1 in Customer Satisfaction with Mortgage Origination - J.D. Power",{"type":104,"children":562},[563],{"type":107,"tag":108,"props":564,"children":565},{},[566],{"type":116,"value":560},{"title":7,"searchDepth":179,"depth":179,"links":568},[],{"data":570,"body":572,"toc":589},{"title":7,"description":571},"For J.D. Power 2025 award information, visit jdpower.com/awards.",{"type":104,"children":573},[574],{"type":107,"tag":108,"props":575,"children":576},{},[577,579,587],{"type":116,"value":578},"For J.D. Power 2025 award information, visit ",{"type":107,"tag":144,"props":580,"children":584},{"href":581,"rel":582},"https://www.jdpower.com/business/awards",[583],"nofollow",[585],{"type":116,"value":586},"jdpower.com/awards",{"type":116,"value":588},".",{"title":7,"searchDepth":179,"depth":179,"links":590},[],{"_path":592,"_dir":84,"_draft":6,"_partial":6,"_locale":7,"slug":99,"content":593,"_id":594,"_type":78,"title":595,"_source":80,"_file":596,"_extension":78},"/disclosures/default","This page provides general information regarding mortgages or home equity lines of credit. Citi's offerings and lending guidelines may be different. This content is for educational purposes. It is not intended to provide legal, investment, tax, or financial advice and is not a substitute for professional advice. For advice about your specific circumstances, you should consult a mortgage professional and refer to the information and disclosures provided to you by the lender you choose regarding its products and services.\n\nTerms, conditions and fees for accounts, programs, products and services are subject to change without notice. This is not a commitment to lend. All loans and offers are subject to standard underwriting guidelines and required conditions. This offer contains information about U.S. domestic financial services provided by Citibank, N.A. and is intended for use domestically in the U.S. Certain restrictions may apply on all programs.","content:disclosures:default.json","Default","disclosures/default.json",{"_path":598,"_dir":84,"_draft":6,"_partial":6,"_locale":7,"content":599,"slug":600,"_id":601,"_type":78,"title":602,"_source":80,"_file":603,"_extension":78},"/disclosures/spanish-language-disclosure","\u003Csup>†\u003C/sup>Please be advised that verbal and written communication from Citi may be in English as we may not be able to provide servicing related communications in all languages. These communications may include, but are not limited to, account agreements, statements and disclosures, change in terms or fees; or any servicing of your account. If you need assistance in a language other than English, please contact us as we have language services that may be of assistance to you.\n\n\u003Cspan lang=\"es\">Por favor, tenga en cuenta que las comunicaciones verbales y escritas de Citi podrían estar únicamente en inglés, ya que, tal vez, no podamos proporcionar comunicaciones relacionadas con los servicios en todos los idiomas. Estas comunicaciones podrían incluir, entre otras, contratos, divulgaciones y estados de cuenta, cambios en los términos o en los cargos, así como cualquier documento de mantenimiento de su cuenta. Si necesita ayuda en un idioma distinto al inglés, por favor, comuníquese con nosotros, ya que tenemos servicios de idiomas que podrían serle útiles.\u003C/span>","spanish-language-disclosure","content:disclosures:spanish-language-disclosure.json","Spanish Language Disclosure","disclosures/spanish-language-disclosure.json",{"data":605,"body":607,"toc":618},{"title":7,"description":606},"This page provides general information regarding mortgages or home equity lines of credit. Citi's offerings and lending guidelines may be different. This content is for educational purposes. It is not intended to provide legal, investment, tax, or financial advice and is not a substitute for professional advice. For advice about your specific circumstances, you should consult a mortgage professional and refer to the information and disclosures provided to you by the lender you choose regarding its products and services.",{"type":104,"children":608},[609,613],{"type":107,"tag":108,"props":610,"children":611},{},[612],{"type":116,"value":606},{"type":107,"tag":108,"props":614,"children":615},{},[616],{"type":116,"value":617},"Terms, conditions and fees for accounts, programs, products and services are subject to change without notice. This is not a commitment to lend. All loans and offers are subject to standard underwriting guidelines and required conditions. This offer contains information about U.S. domestic financial services provided by Citibank, N.A. and is intended for use domestically in the U.S. Certain restrictions may apply on all programs.",{"title":7,"searchDepth":179,"depth":179,"links":619},[],{"data":621,"body":623,"toc":646},{"title":7,"description":622},"†Please be advised that verbal and written communication from Citi may be in English as we may not be able to provide servicing related communications in all languages. These communications may include, but are not limited to, account agreements, statements and disclosures, change in terms or fees; or any servicing of your account. If you need assistance in a language other than English, please contact us as we have language services that may be of assistance to you.",{"type":104,"children":624},[625,636],{"type":107,"tag":108,"props":626,"children":627},{},[628,634],{"type":107,"tag":629,"props":630,"children":631},"sup",{},[632],{"type":116,"value":633},"†",{"type":116,"value":635},"Please be advised that verbal and written communication from Citi may be in English as we may not be able to provide servicing related communications in all languages. These communications may include, but are not limited to, account agreements, statements and disclosures, change in terms or fees; or any servicing of your account. If you need assistance in a language other than English, please contact us as we have language services that may be of assistance to you.",{"type":107,"tag":108,"props":637,"children":638},{},[639],{"type":107,"tag":640,"props":641,"children":643},"span",{"lang":642},"es",[644],{"type":116,"value":645},"Por favor, tenga en cuenta que las comunicaciones verbales y escritas de Citi podrían estar únicamente en inglés, ya que, tal vez, no podamos proporcionar comunicaciones relacionadas con los servicios en todos los idiomas. Estas comunicaciones podrían incluir, entre otras, contratos, divulgaciones y estados de cuenta, cambios en los términos o en los cargos, así como cualquier documento de mantenimiento de su cuenta. Si necesita ayuda en un idioma distinto al inglés, por favor, comuníquese con nosotros, ya que tenemos servicios de idiomas que podrían serle útiles.",{"title":7,"searchDepth":179,"depth":179,"links":647},[],{"data":649,"body":650,"excerpt":-1,"toc":656},{"title":7,"description":189},{"type":104,"children":651},[652],{"type":107,"tag":108,"props":653,"children":654},{},[655],{"type":116,"value":189},{"title":7,"searchDepth":179,"depth":179,"links":657},[],{"data":659,"body":661,"excerpt":-1,"toc":676},{"title":7,"description":660},"You can see if your address is eligible for the HomeReady® $2,500 credit toward a down payment or closing costs using  Fannie Mae’s area median look-up tool.",{"type":104,"children":662},[663],{"type":107,"tag":108,"props":664,"children":665},{},[666,668,675],{"type":116,"value":667},"You can see if your address is eligible for the HomeReady® $2,500 credit toward a down payment or closing costs using  ",{"type":107,"tag":144,"props":669,"children":672},{"href":670,"rel":671},"https://ami-lookup-tool.fanniemae.com/",[583],[673],{"type":116,"value":674},"Fannie Mae’s area median look-up tool",{"type":116,"value":588},{"title":7,"searchDepth":179,"depth":179,"links":677},[],[679,737,793,853,893,941,988,1027,1085,1139,1180],{"_path":680,"_dir":681,"_draft":6,"_partial":6,"_locale":7,"readTime":682,"l1":681,"linkNav":683,"heroMedia":687,"teaserImage":690,"slug":692,"sections":693,"date":709,"subheadline":710,"headline":711,"isFeatured":6,"tags":712,"link":715,"seo":718,"hasSectionNavigation":27,"_id":721,"_type":78,"title":722,"_source":80,"_file":723,"_extension":78,"tagsDetails":724},"/articles/home-buying/mortgage-insurance","home-buying",7,{"introText":684,"text":685,"to":686},"Ready for the next step?","Connect with a Citi Specialist","/contact",{"landscape":688,"portrait":689},"/media/article-mortgage-insurance-mobile-768x512.jpg","/media/article-mortgage-insurance-desktop-520x638.jpg",{"src":691},"/media/article-mortgage-insurance-teaser-500x500.jpg","mortgage-insurance",[694,697,700,703,706],{"title":695,"content":696},"Understanding private mortgage insurance","::callout{title=\"What is mortgage insurance?  \" body=\"Mortgage insurance is an added insurance that protects lenders from financial loss if a borrower is unable to make their payments. There are a few types of mortgage insurance, each with its own requirements.\" :media='{\"landscape\":\"/media/article-callout-landscape.png\",\"portrait\":\"/media/article-callout-portrait.jpg\"}'}\n::\n\n### Private mortgage insurance (PMI) explained\n\nPrivate mortgage insurance (PMI), also known simply as mortgage insurance, is a monthly premium that lenders charge when you put less than 20% down on a conventional home loan. You may also be required to hold mortgage insurance when [refinancing ](/refinancing/articles/rate-and-term/)if you have less than 20% equity in the home.\n\nDon’t confuse mortgage insurance with [homeowners insurance ](/home-buying/articles/what-is-homeowners-insurance/), which protects you if your home or belongings get damaged.\n\n### Mortgage insurance premium (MIP) for FHA loans\n\nAn [FHA loan ](/home-loans/fha-loan/)can offer more lenient credit requirements than a conventional loan and a down payment as low as 3.5%. FHA loans come with a mortgage insurance premium (MIP) instead of PMI. Both MIP and PMI protect the lender in the event you default on your loan, but they operate differently. A MIP has two parts: a one-time upfront premium as part of the closing cost, plus an annual payment.\n\n### Mortgage protection insurance (MPI): Optional coverage\n\nMortgage protection insurance (MPI) is an optional policy that will pay off your mortgage when you die, so your loved ones won’t have to carry the burden of an unpaid home loan. MPI may not be necessary if you have a life insurance policy.",{"title":698,"content":699},"Mortgage insurance costs by loan type","### PMI for conventional mortgages\n\nSo, how much is mortgage insurance? It depends. PMI isn’t a flat fee—it’s usually 0.2% to 2% of the original loan amount annually. Most of your mortgage insurance fees are part of your monthly mortgage payment.\n\nYour financial stats influence how much a lender decides to charge you for PMI: The riskier your profile, the higher percentage you’ll likely have to pay. Let’s walk through some factors lenders will consider.\n\n* **Down payment:** Even if you can’t afford 20%, a higher [down payment](/home-buying/articles/how-much-down-payment-for-a-house/) could shave down your PMI costs.\n* **Credit score:** Stronger credit shows you’re good at managing debts, which could get you a lower PMI rate.\n* **Mortgage amount:** Larger loans are saddled with higher PMI costs since the lender is taking on more risk.\n* **Mortgage type:** [Adjustable-rate loans](/home-loans/adjustable-rate/) are riskier for lenders than [fixed-rate loans](/home-loans/fixed-rate/), so they generally come with higher PMI costs.\n\n### MIP for FHA loans\n\nIf you have an FHA loan, MIP comes in two forms: the upfront premium and the annual payment. The upfront premium is a one-time payment of 1.75% of your total loan. Usually this is paid upfront, but it can also be tacked onto your loan balance.\n\nYour annual MIP will generally be 0.45% to 1.05% of your loan balance, divided up over your monthly payments. If your down payment is less than 10%, you’ll be stuck with the annual premium for the entire loan term. You usually can’t cancel MIP unless you refinance to a different type of loan.\n\n### VA funding fees\n\nIf you’re a veteran, an active service member, or a surviving spouse, a VA loan might be a no-down-payment option. Instead of PMI, you’ll owe a one-time funding fee, which is a small percentage of the total loan. Even though a down payment isn’t required, you may want to bring some cash to the table: The higher your down payment, the lower your funding fee will be.",{"title":701,"content":702},"Strategies to avoid private mortgage insurance","### Making a 20% down payment\n\nPutting down 20% means you don’t need to pay for mortgage insurance. Saving up 20% of a home’s purchase price is no easy feat, so it’s important to weigh the pros and cons: Do you want to get into a home now and start building equity, or would you rather keep saving to avoid the cost of mortgage insurance? If home prices are surging, mortgage insurance might be cheaper than waiting to buy.\n\n### Exploring government-backed loans\n\nTake a closer look at conventional loan alternatives like [FHA ](/home-loans/fha-loan/)and [VA](/home-loans/va-loan/) loans, which can help make homeownership more affordable. See if you qualify for one of these [government-backed loans](/home-buying/articles/government-backed-home-loans/) so you can avoid paying PMI.\n\nCiti offers conventional and government-backed [home loans](/home-loans/) to help you find a mortgage that fits your down payment, credit profile and long-term goals.\n\n### Considering lender-paid mortgage insurance (LPMI)\n\nYou can build the cost of your mortgage insurance into your mortgage rate with lender-paid mortgage insurance. You won’t be charged a monthly PMI payment, but you will pay a higher rate for the life of your loan. Your credit score and down payment are key components in determining the increase in your rate, so you’d need to do the math to determine the more affordable option: paying mortgage insurance or paying the higher rate.",{"title":704,"content":705},"How to remove mortgage insurance","###  Automatic cancellation at 22% equity\n\nYour lender is legally required to cancel PMI once you reach 22% in home equity, or one month after your loan’s midpoint (15 years into a 30-year loan, for example) as long as you are current on your payments. This doesn’t require action on your part, but there are more proactive ways to save.  \n\n###  Requesting cancellation at 20% equity\n\nMark your calendar for the day you hit 20% equity in your home. That’s when you can write to your lender or loan servicer and request that mortgage insurance be taken off your bill. You’ll need to be current on your payments and have a healthy payment history to qualify for PMI cancellation.\n\n### Refinancing to eliminate MIP\n\nIf you have an FHA loan and want to avoid mortgage insurance premiums, you may want to [refinance](/refinancing/) to a different[ loan type](/home-loans/articles/types-of-loans/). You can test the refinance waters and run through different rate and term scenarios using our [Refinance Calculator](/calculators/refinance/). Keep in mind that when you refinance, you’ll need to pay closing costs, which can be between 2–6% of the loan amount.\n\n###  Cancelling PMI through home appreciation\n\nIf your home has appreciated in value due to market conditions or big renovations, you might have more home equity than you think. You can request a new appraisal of your home from your lender. They’ll compare your remaining loan balance to the home’s appraised value to determine how much equity you have. Depending on how long you’ve been in the home, you may need to reach 25% estimated equity to cancel PMI.",{"title":707,"content":708},"Comparing mortgage insurance options ","### PMI vs. MIP: Key differences\n\n::content-table{:useBullets=false :tableData='[{\"row\":[{\"column\":\"Private mortgage insurance (PMI)\"},{\"column\":\"Mortgage insurance premium (MIP)\"}]},{\"row\":[{\"column\":\"For conventional loans\"},{\"column\":\"For FHA loans only \"}]},{\"row\":[{\"column\":\"Only required with down payment of less than 20%\"},{\"column\":\"Required for all FHA loans regardless of down payment size\"}]},{\"row\":[{\"column\":\"Monthly payments\"},{\"column\":\"Upfront premium and annual payment\"}]},{\"row\":[{\"column\":\"Can be cancelled at request once 20% equity is reached\"},{\"column\":\"Can’t be cancelled if you put less than 10% down\"}]},{\"row\":[{\"column\":\"Cost varies based on multiple factors\"},{\"column\":\"Cost is more standardized and less influenced by borrower’s financials\"}]},{\"row\":[{\"column\":\"Lower initial loan-related costs compared to MIP’s upfront premium\"},{\"column\":\"Qualifying is easier for borrowers with lower credit scores and smaller down payments\"}]}]'}\n::\n\n### Pros and cons of PMI and MIP\n\n **Private mortgage insurance for conventional loans** \n\n::content-table{:useBullets=false :tableData='[{\"row\":[{\"column\":\"Pros of PMI\"},{\"column\":\"Cons of PMI\"}]},{\"row\":[{\"column\":\"Allows for down payment of less than 20%\"},{\"column\":\"Increases monthly mortgage payment\"}]},{\"row\":[{\"column\":\"Helps first-timer buyers and those with limited savings qualify for a mortgage\"},{\"column\":\"Protects only the lender, not the buyer\"}]},{\"row\":[{\"column\":\"Allows buyers to purchase now and build equity instead of waiting to save\"},{\"column\":\"Adds to long-term loan costs without building equity directly\"}]},{\"row\":[{\"column\":\"Cancelled automatically once owner reaches 22% equity \"},{\"column\":\"Depending on lender, requesting PMI removal can be cumbersome \"}]}]'}\n::\n\n **Mortgage insurance premium for FHA loans** \n\n::content-table{:useBullets=false :tableData='[{\"row\":[{\"column\":\"Pros of MIP\"},{\"column\":\"Cons of MIP\"}]},{\"row\":[{\"column\":\"Allows for down payment as little as 3.5% and lower credit scores\"},{\"column\":\"Mandatory for FHA loans regardless of down payment size \"}]},{\"row\":[{\"column\":\"Helps first-time borrowers and those with lower income \"},{\"column\":\"Required for entire loan term if down payment is less than 10%\"}]},{\"row\":[{\"column\":\"May be refinanced to a conventional loan to remove MIP \"},{\"column\":\"Upfront premium plus annual fee add to total cost of loan\"}]}]'}\n::","2026-04-23T09:08:00.000Z","**Key insights:**\n\n* Mortgage insurance protects the lender—not the borrower—and is typically required when you put less than 20% down, with different structures depending on loan type\n* The cost and flexibility of mortgage insurance vary widely by loan program\n* Borrowers have multiple strategies to reduce or eliminate mortgage insurance over time, including building equity, refinancing and leveraging home appreciation\n\nWhen you have a [conventional loan](/home-loans/conventional-loan/) with a smaller [down payment](/home-buying/articles/how-much-down-payment-for-a-house/), lenders often require you to hold private mortgage insurance (PMI) to help them recover costs if you can’t make the payments. No one wants a bigger mortgage bill, so here’s the rundown on mortgage insurance and how you can manage your costs.","What is mortgage insurance and why do you need it?",[713,714,681],"insurance","first-time-buyer",{"introText":716,"text":685,"to":686,"body":717},"Need help finding the right loan for you?","Citi can help you narrow down your options and determine which is more affordable in the long run.",{"title":719,"description":720},"What is Mortgage Insurance and Why Do You Need It | Mortgage.com","Wondering if you need mortgage insurance? Learn the different types, when it's required and how to navigate making monthly payments.","content:articles:home-buying:mortgage-insurance.json","Mortgage Insurance","articles/home-buying/mortgage-insurance.json",[725,729,733],{"label":726,"slug":714,"seo":727},"First Time Buyer",{"description":728},"Learn more about first time buyer with helpful articles, tools, and guides to support your homeownership journey.",{"label":730,"slug":681,"seo":731},"Home Buying",{"description":732},"Learn more about home buying with helpful articles, tools, and guides to support your homeownership journey.",{"label":734,"slug":713,"seo":735},"Insurance",{"description":736},"Learn more about insurance with helpful articles, tools, and guides to support your homeownership journey.",{"_path":738,"_dir":681,"_draft":6,"_partial":6,"_locale":7,"readTime":739,"l1":681,"linkNav":740,"heroMedia":741,"teaserImage":744,"slug":746,"sections":747,"date":769,"subheadline":770,"headline":771,"isFeatured":6,"tags":772,"link":775,"seo":778,"hasSectionNavigation":27,"_id":781,"_type":78,"title":782,"_source":80,"_file":783,"_extension":78,"tagsDetails":784},"/articles/home-buying/how-to-get-rid-of-pmi",5,{"introText":684,"text":685,"to":686},{"landscape":742,"portrait":743},"/media/when-and-how-you-can-remove-pmi-from-a-mortgage-mobile.jpg","/media/when-and-how-you-can-remove-pmi-from-a-mortgage-desktop.jpg",{"src":745},"/media/when-and-how-you-can-remove-pmi-from-a-mortgage-teaser.jpg","how-to-get-rid-of-pmi",[748,751,754,757,760,763,766],{"title":749,"content":750},"When does PMI automatically end?","Under the Homeowners Protection Act (HPA), lenders are legally required to cancel [PMI ](/home-buying/articles/pmi-home-loan/)once your mortgage balance reaches 78% of your home’s original value—that is, when you’ve built up 22% equity.  \n\nThis automatic cancellation:\n\n*  Is based on the original property value at the time you bought your home\n* Applies only if you’re current on your payments\n* Does not require you to ask; your lender must remove it once the threshold is met\n\n::tip{icon=\"Bulb\" title=\"PRO TIP\" text=\"If you’ve been steadily paying down your mortgage, [mortgage insurance](/home-buying/articles/mortgage-insurance/) cancellation often happens around the midpoint of your loan term, though it can come sooner if you’ve made [extra payments](/refinancing/articles/how-to-pay-off-your-mortgage-faster/).\"}\n::",{"title":752,"content":753},"When can you request mortgage PMI removal?","You don’t have to wait for your lender to remove PMI automatically. You can actually request it earlier once your loan-to-value ratio (LTV) reaches 80%.  \n\nThat means you’ve gained 20% equity in your home through one or more of the following:  \n\n* Regular monthly payments that reduce principal\n* Extra payments directly toward principal\n* A shorter or accelerated amortization schedule  \n\nTo qualify, you’ll generally need to:\n\n* Be current on your [mortgage payments](/home-loans/articles/how-to-lower-mortgage-payment/)\n* [](/home-loans/articles/how-to-lower-mortgage-payment/)Have a good payment history (no serious delinquencies)\n* Verify that your home hasn’t decreased in value  \n\nIf you meet those conditions, your lender is required to review your request and remove PMI once you qualify.",{"title":755,"content":756},"Using a new appraisal to get rid of PMI","Rising home values can help you eliminate PMI sooner even if your original mortgage balance hasn’t reached 80% of the purchase price.\n\nYou can request PMI removal based on your home’s current market value, but lenders set specific conditions:  \n\n* You’ll likely need to pay for a professional appraisal to confirm your home’s new value\n* Many lenders require 2–5 years of on-time payments before considering removal based on appreciation\n* Documented home improvements (like a kitchen renovation or an addition) may help boost your appraised value \n\nIf your home’s value has increased significantly, an [updated appraisal ](/home-buying/articles/home-appraisal/)could help you cross the 20% equity mark earlier, saving you money every month.",{"title":758,"content":759},"Steps to request PMI removal","If you think you qualify, here’s what to do:  \n\n* **Contact your lender or mortgage servicer:** Ask for their PMI removal process and eligibility requirements\n* **Confirm your current loan balance and LTV:** You can calculate this by dividing your loan balance by your home’s value  \n* **Gather your payment history:** Some lenders may ask for verification of on-time payments  \n* **Request an appraisal if needed:** If your lender allows PMI removal based on current market value, they’ll specify appraisal guidelines  \n* **Submit a written request:** This request would formally ask for a PMI cancellation.  \n* **Wait for lender review and confirmation:** They’ll provide a written response once your PMI is removed  \n\n This process is common, straightforward and clearly regulated. If you’re exploring new home financing or looking to refinance to remove PMI, remember that Citi’s [home loans](/home-loans/) offer a range of mortgages to fit different financial needs.",{"title":761,"content":762},"Can you speed up PMI removal?","Yes! A few smart financial moves can help you reach that equity threshold faster. Some things you might try: \n\n* **Make extra payments toward principal:** Even a few hundred dollars per year can accelerate paying your mortgage down enough to qualify  \n* **Recast your mortgage:** This can happen after a large lump-sum payment (such as from a bonus or inheritance)  \n* **Maintain strong credit:** Lenders are more likely to approve early removal when you have a solid payment history  \n* **Track local home price trends:** Rising property values can push your equity higher faster than expected\n* **Consider refinancing:** If interest rates have dropped or your credit has improved, [refinancing](/refinancing/) may eliminate PMI entirely while lowering your rate",{"title":764,"content":765},"When lenders may delay PMI removal","Sometimes, PMI sticks around longer than you’d like. Here are some common reasons why: \n\n* Late or missed payments disqualify you from early removal\n* Declining property value based on a new appraisal\n* High-risk loan classification, such as a recent delinquency or modification\n* Insufficient equity, even if your payments are current\n\n  If your lender denies removal, they must explain why and what steps are required to requalify, usually improving payment consistency or re-establishing equity through additional payments or rising values.",{"title":767,"content":768,"hideTitle":27},"PMI removal FAQs","::faq{headline=\"PMI removal FAQs\" :faqs='[{\"question\":\"Does PMI go away at 20% equity?\",\"answer\":\"Lenders are required to remove PMI automatically when you’ve built up 22% equity in your home. However, you can request an earlier removal once you reach 20% equity.\"},{\"question\":\"Can PMI be removed if my home value increases?\",\"answer\":\"Yes, in some circumstances, an increased home value can help you remove PMI ahead of schedule. You generally need a new appraisal and a history of on-time payments. If you’ve made renovations or repairs that boosted your home’s value, that may help.\"},{\"question\":\"Why do I need PMI?\",\"answer\":\"PMI is usually required if you make a down payment under 20%. It protects the lender in case you stop making payments on your mortgage.\"}]'}\n::","2026-04-17T09:26:00.000Z","**Key insights:**\n\n* Private mortgage insurance is typically required with a down payment under 20%, but it doesn’t have to last for the life of your loan  \n* Federal rules require lenders to automatically cancel PMI at 78% loan-to-value, and many homeowners can request removal earlier at 80%  \n* Building equity through regular payments, extra principal contributions or rising home values can help lower your monthly payment by eliminating PMI sooner  \n\nPrivate mortgage insurance (PMI) doesn’t have to be forever. Many homeowners have the option of removing it once they’ve built enough equity in their homes, thereby lowering their monthly payments. Here, we’ll walk through when PMI automatically ends, how to remove PMI from a mortgage ahead of schedule and what steps can be taken to help you reach that goal faster.","How to get rid of PMI on your mortgage",[773,774],"home-loans","budget-planning",{"introText":776,"body":777,"text":685,"to":686},"Still have questions about how to get PMI removed?","We'll walk you through this type of mortgage insurance and when you may be able to remove it.",{"title":779,"description":780},"How to Get Rid of PMI | Mortgage.com","Discover when private mortgage insurance can be removed, how to request PMI cancellation early and ways to build equity to lower your monthly mortgage payment.","content:articles:home-buying:how-to-get-rid-of-pmi.json","How To Get Rid Of Pmi","articles/home-buying/how-to-get-rid-of-pmi.json",[785,789],{"label":786,"slug":774,"seo":787},"Budget Planning",{"description":788},"Learn more about budget planning with helpful articles, tools, and guides to support your homeownership journey.",{"label":790,"slug":773,"seo":791},"Home Loans",{"description":792},"Explore resources about home loans—including types, requirements, and how to choose the right mortgage option.",{"_path":794,"_dir":681,"_draft":6,"_partial":6,"_locale":7,"readTime":682,"l1":681,"linkNav":795,"heroMedia":797,"teaserImage":800,"slug":802,"sections":803,"date":834,"subheadline":835,"headline":836,"isFeatured":6,"tags":837,"link":839,"seo":842,"hasSectionNavigation":27,"_id":845,"_type":78,"title":846,"_source":80,"_file":847,"_extension":78,"tagsDetails":848},"/articles/home-buying/mortgage-self-employed",{"introText":684,"text":685,"to":796},"#leadform",{"portrait":798,"landscape":799},"/media/howgetmortgage-selfemployed-dsk.png","/media/howgetmortgage-selfemployed-mob.png",{"src":801},"/media/howgetmortgage-selfemployed-teaser.jpg","mortgage-self-employed",[804,807,810,813,816,819,822,825,828,831],{"title":805,"hideTitle":27,"content":806},"Disclaimer","**Disclaimer:** Citi may have different eligibility criteria and/or product offerings than those mentioned on mortgage.com.",{"title":808,"content":809},"What counts as “self-employed”?","When lenders talk about being self-employed, they mean a wide range of work situations, from\npart-time gig workers to full-time business owners. You’re generally considered\nself-employed if you’re: \n\n* **A sole proprietor:** You own and run the business yourself, and the business isn’t legally\n  separate from you. Income and expenses typically show up on your personal tax\n  return. \n* **A freelancer or independent contractor who receives 1099 forms:** You work for yourself rather than for\n  a single employer, often taking on projects or clients throughout the year.\n  Instead of a W-2, clients report what they pay you on 1099 forms. \n* **An owner of an LLC or partnership:** You share ownership of a business with one or more people or operate through\n  a limited liability company. The way you get paid depends on how the business\n  is set up. \n* **A business owner with a significant ownership stake:** You may get a regular\n  paycheck, but because you own a large portion of the business, lenders still\n  look at how the company’s doing when reviewing your mortgage application. \n\nIf you don’t pocket the same amount on a predictable biweekly schedule, you’re not alone. Income swings are normal when you work for yourself, and lenders take that into\naccount when reviewing your application.",{"title":811,"content":812},"How mortgages work for self-employed borrowers","When lenders for a [mortgage](/home-loans/articles/what-is-a-mortgage/) review an application, they’re not\nfocused on job titles. Instead, they want to understand whether your income can\nreliably support a home loan over time. \n\nTo do that, lenders usually look at your earnings over the past one to two years and calculate an average. If your income has stayed steady or grown, that can work in your favor. If it’s dipped at times, lenders may ask a few follow-up questions to better understand why. \n\nAnother factor that comes into play? Tax deductions. While deductions help reduce your\ntax bill, they can lower the income lenders use when determining how big of a loan you qualify for. It’s one reason self-employed borrowers might need to plan a bit further ahead.",{"title":814,"content":815},"Key requirements for a self-employed mortgage","Every mortgage application is different, but lenders generally look for a few common signals of financial stability:\n\n* **A steady income history:** Lenders usually like to see a track record of self-employed income, often going back about 2 years.\n* **Good credit:** Your [credit score](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house/) and history help lenders see how you’ve managed credit in the past. Strong credit can be especially helpful for self-employed borrowers because it shows reliability, even when income isn’t perfectly predictable.\n* **Manageable debt:** Lenders look closely at your [debt-to-income ratio (DTI)](/home-buying/articles/what-is-a-good-debt-to-income-ratio/), which compares your monthly debt obligations to your income. A lower DTI may make a lender feel more comfortable that you can take on a mortgage alongside your other financial responsibilities.\n* **Consistent or growing business revenue:** Lenders focus on patterns, not one standout month. Steady earnings (or income that trends upward over time) can show that your business is solid.\n* **An active business:** Lenders want to confirm that your business is currently operating and earning money so you can pay back what you borrow.\n\nRemember: You don’t need your finances to be perfect. The goal is to show that your income, even if it varies month to month, is dependable over time.",{"title":817,"content":818},"What documents do lenders typically require?","When you’re self-employed, lenders usually ask for a few more documents than they would from someone with a traditional paycheck. That can feel stressful at first, but it’s completely normal. Lenders are just trying to get a better idea of your income and business.\n\nYou might be asked to show:\n\n* Personal tax returns from the past 2 years\n* Business tax returns from the past 2 years\n* Year-to-date profit and loss statements\n* Balance sheets\n* Personal and business bank statements\n* A business license, if applicable\n* Verification letters from a CPA, in some cases\n\nHaving these documents organized and responding promptly can help the process feel smoother and less overwhelming.",{"title":820,"content":821},"How to improve your chances of approval","A little preparation can make a big difference. Before applying, consider taking these steps:\n\n* **Review your credit early:** This gives you time to address any issues, like a mistake on your report\n* **Reduce outstanding debt:** Lower balances can show lenders you’re ready to take on a mortgage\n* **Separate business and personal finances:** Clear records make it easier for lenders to review your income\n* **Be mindful of tax deductions:** Large write-offs can limit qualifying income\n* **Build cash reserves:** Savings can help show stability during slower months\n* **Share current financials:** Up-to-date statements help tell your story",{"title":823,"content":824},"What challenges do self-employed borrowers commonly face?","Self-employed borrowers often face a few common challenges during the mortgage process, but the good news is that each one can be addressed with the right preparation. \n\n### Income that changes month to month\n\nThis is common for self-employed borrowers. Lenders usually look at longer-term income trends rather than any single month to understand how your business is doing. \n\n### Tax deductions that lower qualifying income \n\nDeductions can reduce the income lenders use for qualification. Planning ahead can help set clear expectations and avoid surprises. For instance, you might choose not to take a big deduction on new office equipment the same year you’re planning to buy a home. \n\n### Requests for additional documents\n\nFollow-up questions and document requests are a normal part of the process, not red flags. They help lenders build a complete picture of how your income works. When you get these requests, being quick and responsive can help move your application along.\n\n### A newer business \n\nIf your business hasn’t been operating for long, lenders may take a closer look. Consistent records and proof of ongoing activity can help demonstrate stability.\n\nWhile these challenges can feel frustrating, they’re also very common. With clear records and timely responses, most issues can be addressed without derailing your timeline.",{"title":826,"content":827},"Are there self-employed-friendly loan options available? ","If you’re self-employed, certain loan options may offer a bit more flexibility, depending on your financial situation:\n\n* **[FHA loans](/home-loans/fha-loan/):** These government-backed loans often allow more flexibility around credit history and qualifying requirements.\n* **Bank statement loans (where available):** Some lenders may review personal or business bank statements instead of tax returns to get a better idea of cash flow, which can be helpful if deductions reduce your reported income.\n* **Non-qualified mortgage loans:** These loans fall outside traditional lending rules and might rely on alternative documentation, like bank statements, to show income that doesn’t come from a regular paycheck. Just remember, though: These types of loans don’t fall under Consumer Financial Protection Bureau (CFPB) protections and may involve higher down payments or interest rates.\n* **Programs like the** [**Citi HomeRun**® **mortgage**](/home-loans/home-run/)**:** Designed to support eligible buyers, these mortgage options have more flexible credit guidelines, especially when your income doesn’t come from a traditional paycheck. \n\n::card{eyebrowIcon=\"\" body=\"There’s plenty more to explore.\" imagePosition=\"top\" ctaType=\"text-arrow\" marginSize=\"small\" headline=\"Don’t see the right home loan for you?\" backgroundColor=\"\" icon=\"Homebuyer\" link=\"/home-loans/\" ctaText=\"Explore home loans\"}\n::",{"title":829,"content":830},"How to apply for a mortgage when you’re self-employed","Breaking the mortgage process into smaller steps can make it feel far more approachable, especially when you’re self-employed. Here’s how it typically unfolds:\n\n1. **Take a close look at your income and credit:** Start by reviewing your recent income trends and credit profile so you have a clear sense of where you stand. This can help you spot any areas you may want to address before applying.\n2. **Gather key documents early:** Pull together tax returns, financial statements and bank records ahead of time. Having everything ready can help keep the process smooth when it comes time to apply.\n3. **Get [prequalified or pre-approved](/home-buying/articles/prequalified-vs-pre-approved/):** This step gives you a better idea of your price range and shows sellers that you’re serious and prepared.\n4. **Submit your application and documents:** Once you apply, you’ll share the supporting paperwork lenders need to review your income and finances in more detail.\n5. **Respond quickly to follow-up requests:** It’s common for lenders to ask questions or request additional documents. Quick responses can help keep things on track.\n6. **Review final documents and close:** Before [closing](/tags/closing/), you’ll review the final paperwork and confirm the details. Once everything’s signed and you’ve made your down payment, you’re on your way to homeownership.\n\n::card{eyebrowIcon=\"\" body=\"The Citi SureStart Pre-Approval comes with a firm commitment to lend.\" imagePosition=\"top\" ctaType=\"text-arrow\" marginSize=\"small\" :isInlineCard=false headline=\"Ready to get pre-approved?\" backgroundColor=\"\" icon=\"Penpaper\" link=\"https://www.citi.com/mortgage/surestart-preapproval\" ctaText=\"Learn More\"}\n::\n\n::disclaimer-dialog{buttonCopy=\"Citi SureStart® Terms & Conditions\" :dialogCopy='\"## Citi SureStart® Terms & Conditions\\n\\nSureStart® Pre-Approval is a registered service mark of Citigroup Inc. Final commitment is subject to verification of information, receipt of a satisfactory sales contract on the home you wish to purchase, appraisal and title report, and meeting our customary closing conditions. There is no charge to receive a SureStart® Pre-Approval. However, standard application and commitment fees will apply for the mortgage loan application.\"'}\n::",{"title":832,"content":833,"hideTitle":27},"Self-employed Mortgage FAQs","::faq{:faqs='[{\"question\":\"Can I get approved for a mortgage if I’m self-employed?\",\"answer\":\"Yes. You may need to provide some additional documentation, like business and personal tax returns from the last 2 years, but it’s possible to get a mortgage if you’re self-employed.\"},{\"question\":\"How do I prove self-employment income for a mortgage?\",\"answer\":\"Lenders usually look at tax returns, bank statements, profit-and-loss statements and balance sheets to understand your self-employment income. They may ask for more information if they have questions about your earnings.\"},{\"question\":\"How long do I need to be self-employed to qualify for a mortgage?\",\"answer\":\"Many lenders like to see consistent income for 2 years, but requirements vary. Check with your mortgage lender if you’re not sure you qualify.\"}]' headline=\"Self-employed Mortgage FAQs\"}\n::","2026-03-12T08:45:00.000Z","Key insights:\n\n* Being self-employed doesn’t prevent you from getting a mortgage, but lenders may take a closer look at how your income has performed over time\n* Preparing clear, well-organized financial documents can make the approval process smoother and reduce back-and-forth with lenders\n* Choosing the right loan type and planning ahead can improve your chances of qualifying on terms that work for you\n\nThere’s a lot to love about running your own business. Flexibility? Check. Independence? Check. The freedom to work on your terms? Check. But when it’s time to buy a home, many freelancers, entrepreneurs and gig workers ask the same question: Will being self-employed make getting a mortgage harder?","How to get a mortgage when you’re self-employed",[773,838],"loan-types",{"introText":840,"body":841,"text":685,"to":796},"Self-employed and need help with a mortgage? We’re here to guide you.","We’re here to guide you.",{"title":843,"description":844},"How to Get a Mortgage When You’re Self-Employed | Mortgage.com","Explore how self-employed borrowers can qualify for a mortgage, what income documentation lenders review and how to prepare for a smoother approval process.","content:articles:home-buying:mortgage-self-employed.json","Mortgage Self Employed","articles/home-buying/mortgage-self-employed.json",[849,789],{"label":850,"slug":838,"seo":851},"Loan Types",{"description":852},"Explore resources about loan types—including types, requirements, and how to choose the right mortgage option.",{"_path":854,"_dir":681,"_draft":6,"_partial":6,"_locale":7,"readTime":855,"l1":681,"linkNav":856,"heroMedia":857,"teaserImage":860,"slug":862,"disclosure":99,"sections":863,"date":879,"subheadline":880,"headline":881,"isFeatured":6,"tags":882,"link":883,"seo":886,"hasSectionNavigation":27,"_id":889,"_type":78,"title":890,"_source":80,"_file":891,"_extension":78,"tagsDetails":892},"/articles/home-buying/home-warranty-vs-home-insurance",6,{"introText":684,"text":685,"to":686},{"landscape":858,"portrait":859},"/media/article-home-warranty-home-insurance-mobile-768x512.jpg","/media/article-home-warranty-home-insurance-desktop-520x638.jpg",{"src":861},"/media/article-home-warranty-home-insurance-teaser-500x500.jpg","home-warranty-vs-home-insurance",[864,867,870,873,876],{"title":865,"content":866},"What is a home warranty?","Simply put, it’s a home protection plan for the essential items that keep your home running—like your HVAC, water heater, fridge and more. When one of these appliances or systems breaks down because of normal wear and tear, a home warranty covers its [repair](/home-buying/articles/how-to-negotiate-repairs-after-inspection/) or replacement.\n\n### How does a home warranty work? \n\nThe first step is securing the right warranty for you and your budget. You can typically choose coverage for just appliances, just systems or a combination of both, so choose the option that makes sense for your needs.    \n\nThen, if something does break down, simply contact your provider to file a claim. The home warranty company will send a technician to your home to assess the issue and either repair or replace the item.  \n\nFinally, it’s important to remember that there is generally a service fee (even if the repair or replacement is covered). This can range from $75–$125, depending on your provider and the specifics of your coverage.  \n\n### What does a home warranty cover? \n\nYour home’s appliances and systems won’t last forever, but a home warranty helps cover items you use the most. Let’s look at what’s usually covered—and what isn’t. \n\n* **Appliances:** Refrigerators, ovens, dishwashers, washers and dryers. \n* **Systems:** HVAC, plumbing, electrical. \n* **Exclusions:** Pre-existing conditions, improper maintenance, neglect. \n\n### How much does a home warranty cost?\n\nA home warranty isn’t one-size-fits-all. Its cost depends on how much protection you want. On average, you’ll spend anywhere from $220 to $1,880 a year, with service call fees running between $75 and $125 per visit. The final price depends on things like your home’s location, [its condition](/home-buying/articles/what-is-a-home-inspection/) and, of course, how much coverage you need.\n\n::quote{icon=\"\" quote=\"Your home’s appliances and systems won’t last forever, but a home warranty helps cover items you use the most.\"}\n::",{"title":868,"content":869},"What is home insurance?","Home insurance acts as a safety net for your home, covering damage to your house and belongings, as well as protecting you if someone gets hurt on your property. It’s not just a smart choice—it’s a must-have if you’ve got a mortgage. Lenders require a home insurance policy to protect you (and them) in case disaster strikes.  \n\n### How does home insurance work? \n\nDifferent policies cover different types of homes, but, in general, they all cover incidents like fires, windstorms and theft. That being said, a number of factors impact your coverage, including location, the value of your home and belongings, the size and condition of your home and the deductible—which is the amount you pay out of pocket before the insurance company begins paying.  \n\nFor example, with a $2,000 deductible and a $20,000 covered loss, you pay $2,000 and the insurance company covers the remaining $18,000. So, while higher deductibles can lower premiums, they also increase out-of-pocket costs. Other factors that influence the total amount paid out by your insurance company include coverage limits and the specific damage covered by the policy.  \n\n::tip{icon=\"Bulb\" text=\"Boost your home’s defenses for greater savings. Installing a security system, storm shutters or impact-resistant roofing can lower premiums and add protection.\" title=\"PRO TIP\"}\n::\n\nWhat does home insurance cover? \n\nBefore you sign your policy, it’s important to understand what your policy covers.  \n\n* **Dwelling coverage:** Protects the structure of your home from disasters like fire, windstorms and vandalism. \n* **Personal property:** Covers your belongings if they are damaged or stolen due to covered events such as fire, theft or storms. \n* **Liability protection:** Helps pay for legal fees if someone is injured on your property. \n* **Exclusions:** Does not cover appliance breakdowns, wear and tear or neglect. \n\n### How much does home insurance cost? \n\nWhile the average cost nationally is $1,400 per year, insurance prices can vary significantly depending on several factors, including:  \n\n* **Home value and replacement cost:** The cost to rebuild your home if it is damaged. \n* **Location and risk factors**: Whether your home is in areas prone to floods, wildfires or other natural disasters. \n* **Deductible selection:** Choosing a higher deductible can lower your premiums. \n* **Claims history and credit score**: Your past claims and credit score can affect your insurance rates.",{"title":871,"content":872},"Home warranty vs. home insurance ","::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Coverage Type\"},{\"value\":\"Home Warranty\"},{\"value\":\"Home Insurance\"}]' :rows='[{\"column\":{\"valueOne\":\"Appliances and Systems\",\"valueTwo\":\"Covers repairs and replacements of appliances and systems (HVAC, water heater, refrigerator, etc.) \",\"valueThree\":\"Does not cover appliances or systems \"}},{\"column\":{\"valueOne\":\"Structural Damage\",\"valueTwo\":\"Does not cover structural damage\",\"valueThree\":\"Covers structural damage (fire, hail, theft, vandalism, etc.)\"}},{\"column\":{\"valueOne\":\"Personal Possessions\",\"valueTwo\":\"Does not cover personal possessions\",\"valueThree\":\"May cover personal possessions\"}},{\"column\":{\"valueOne\":\"Liability\",\"valueTwo\":\"Does not provide liability coverage\",\"valueThree\":\"Provides liability coverage for injuries on the property\"}},{\"column\":{\"valueOne\":\"Natural Disasters\",\"valueTwo\":\"May cover some natural disasters but often requires additional coverage\",\"valueThree\":\"Covers natural disasters like fire, hail, lightning, tornado; additional coverage needed for floods and earthquakes\"}},{\"column\":{\"valueOne\":\"Deductibles\",\"valueTwo\":\"Typically covers full cost of repair or replacement, with a service call fee\",\"valueThree\":\"Requires a deductible before coverage kicks in\"}},{\"column\":{\"valueOne\":\"Service Providers\",\"valueTwo\":\"Works with specific repair businesses\",\"valueThree\":\"You can choose your own service providers\"}}]'}\n::\n\n### Coverage differences \n\nYou can remember the differences in home protection coverage like this: a home warranty covers everyday appliances and systems like HVAC units, water heaters and fridges, while home insurance steps in for bigger disasters like fires, storms, theft and even liability if someone gets hurt on your property. \n\n### Cost differences \n\nGiven the nature of its coverage, a home warranty generally costs less per year. However, you will have to pay a service fee for each claim. Home insurance, in contrast, comes with a higher premium and a deductible when you file a claim.  \n\n::tip{icon=\"Bulb\" text=\"Save with annual payments. Some providers offer discounts if you pay for the year up front instead of opting for monthly installments.\" title=\"Pro Tip\"}\n::\n\n### When do you need both? \n\nWhether you’re designing your dream home or [reviving](/home-buying/) a charming fixer-upper, having both a home warranty and home insurance makes good sense. Owners of new homes get peace of mind with full protection on their investment, while owners of older homes safeguard against aging systems, worn-out appliances and unexpected disasters.",{"title":874,"content":875},"Pros and cons of home warranties & home insurance","Before you commit, make sure you understand all the advantages and disadvantages of home insurance and a home warranty.  \n\n### Home warranty pros & cons \n\n*  Covers unexpected appliance and system breakdowns\n* Saves money on unexpected repair costs\n* Service fees apply per claim \n* Not all repairs are covered (exclusions apply) \n\n### Home insurance pros & cons \n\n* Covers home damage, personal belongings and liability \n* Mortgage lenders require it for home loans \n* Higher premiums than home warranties \n* Deductibles must be met before coverage applies",{"title":877,"hideTitle":27,"content":878},"FAQs – Home warranty vs. home insurance","\n\n::faq{headline=\"FAQs – Home warranty vs. home insurance\" :faqs='[{\"question\":\"Do I need both a home warranty and home insurance?\",\"answer\":\"No, you don’t have to have both home insurance and a home warranty. But they are a powerful combination. While home insurance protects against disasters like fires and theft, a home warranty saves you from costly repairs when appliances or systems break down. Together, they give your home complete protection and keep surprises from draining your bank account.\"},{\"question\":\"Does home insurance cover appliance breakdowns?\",\"answer\":\"No, it does not. But a home warranty can keep you covered if your appliances are on the fritz.\"},{\"question\":\"Can I purchase a home warranty at any time?\",\"answer\":\"Yes, you can purchase a home warranty at any time. However, many providers won’t offer coverage until 30 days after signing the contract.\"},{\"question\":\"What happens If my home warranty claim is denied?\",\"answer\":\"If your home warranty claim is denied, you’ll most likely have to cover the cost of any repairs or replacements yourself.\"},{\"question\":\"How do I choose the best home warranty plan?\",\"answer\":\"To pick the best home warranty plan, start by looking at your appliances and systems. If they’re getting older, coverage can save you big by repairing or replacing costly appliances and systems at a fraction of the price. Compare different plans based on what they cover, service fees and any exclusions. Choose between appliance, system or combo plans, and check if you can add extras like pool or hot tub coverage. And always make sure the plan fits your budget and delivers real value when things break down.\"}]'}\n::","2025-04-17T07:24:00.000Z","Wondering how a home warranty differs from home insurance? Take a seat. While both provide protection, they do so in distinct manners. A home warranty takes care of fixing or replacing significant appliances and home systems, whereas home insurance protects your house's structure and personal items from unforeseen events. There's a lot to explore, so let’s delve deeper into the details.","What’s the difference between a home warranty and home insurance?",[713,714,681],{"introText":884,"body":885,"text":685,"to":686},"Still have questions about home warranties or home insurance?","A mortgage specialist can help answer them.",{"title":887,"description":888},"Home Warranty & Home Insurance Compared | Mortgage.com","Confused about home warranty vs. home insurance? Learn the key differences, coverage details, and costs to make an informed choice for your home.","content:articles:home-buying:home-warranty-vs-home-insurance.json","Home Warranty Vs Home Insurance","articles/home-buying/home-warranty-vs-home-insurance.json",[725,729,733],{"_path":894,"_dir":681,"_draft":6,"_partial":6,"_locale":7,"readTime":855,"l1":681,"linkNav":895,"heroMedia":896,"teaserImage":899,"slug":901,"disclosure":99,"sections":902,"date":927,"subheadline":928,"headline":929,"isFeatured":6,"tags":930,"link":931,"seo":934,"hasSectionNavigation":27,"_id":937,"_type":78,"title":938,"_source":80,"_file":939,"_extension":78,"tagsDetails":940},"/articles/home-buying/title-insurance",{"introText":684,"text":685,"to":686},{"landscape":897,"portrait":898},"/media/what-is-title-insurance-mobile-768x512.jpg","/media/what-is-title-insurance-desktop-520x638.jpg",{"src":900},"/media/what-is-title-insurance-teaser-500x500.jpg","title-insurance",[903,906,909,912,915,918,921,924],{"title":904,"content":905},"Definition of title insurance","\nWhat is home title insurance? It’sa policy that protects lenders and homeowners from financial costs if property rights are challenged due to past issues like public record errors or fraudulent documents. Don’t confuse it with the equally important [homeowners insurance](/home-buying/articles/what-is-homeowners-insurance/), which covers future damages to the property.",{"title":907,"content":908},"Importance of title insurance","\nProperty title insurance is an essential piece of the [underwriting process](/home-buying/articles/what-is-mortgage-underwriting/) and the homeownership paper trail, protecting your claim on the property. If there are errors or fraudulent documents lurking in the archives, they can pose serious risks to the latest owners. Individuals or agencies can challenge your ownership if there are undiscovered liens, fraudulent paperwork or conflicting property claims.  \n\n\n::callout{title=\"Title insurance in action\" body=\"Let’s say you discover a lien on your home because the previous owner didn’t pay off their mortgage, or a mysterious heir contests your property claims. Title insurance can offer protection in many situations, reducing the financial burden of defending your property rights.\" :media='{\"landscape\":\"/media/gettyimages-174764619.png\",\"portrait\":\"/media/desktop-327x245.jpg\"}'}\n::",{"title":910,"content":911},"Types of title insurance","There are two types of title insurance: one that protects the lender and one that protects the owner. Keep in mind that these are separate policies and not a two-for-one special.  \n\n### Owner’s title insurance \n\nThis protects the keys to your castle against ownership claims, unknown liens or legal disputes. While this coverage isn’t necessarily required, it’s highly recommended to ensure your peace of mind and financial security. Wondering who pays for owner’s title insurance? Typically, it’s the buyer’s responsibility during [closing costs.](/home-buying/articles/closing-costs/) \n\n::tip{icon=\"Bulb\" :text='\"\\nWhen [negotiating terms of the sale](/home-buying/articles/how-to-make-an-offer/), the buyer and seller can come to an agreement that requires the seller to cover title insurance. When you’re talking terms, this option can help you trim the fat off closing costs.\"' title=\"Pro Tip\"}\n::\n\n### Lender’s title insurance \n\nThe lender also wants to protect their interest in the property when you assume the loan, ensuring the mortgage is valid. Most mortgage lenders require this coverage as a condition of every [home loan](/home-loans/), making it a standard part of the real estate transaction. Depending on the circumstances, the cost of lender’s title insurance can fall on the home buyer or the lender.",{"title":913,"content":914},"Common title issues covered","* **Errors in public records** like misspelled names or incorrect legal descriptions \n* **Unknown liens** from unpaid debts by former owners \n* **Forgery or fraud** in title documents \n* **Undisclosed heirs** claiming ownership \n* **Boundary disputes** with neighbors",{"title":916,"content":917},"Cost of title insurance","Title insurance is usually a one-time premium payment made at closing, not part of monthly [mortgage payments](/calculators/monthly/). According to Fannie Mae, the average cost is 0.42% of the purchase price, varying by state. This one-time fee defends your ownership for as long as you own the property.\n\n::did-you-know{title=\"Did you know that title insurance typically costs: \" :stats='[{\"value\":\"0.5%–1.0%\",\"label\":\"of home purchase price\"}]'}\n::",{"title":919,"content":920},"How to obtain title insurance","You know you need title insurance, but how do you lock it down? Luckily, it’s a fairly easy step in [the closing document process](/home-buying/articles/closing-documents/).  \n\n* **Step 1:** **Choose a reputable title insurance company.** Do your research and pick a company with a reputation for keeping homeowners happy. \n* **Step 2:** **The company performs a title search to detect issues.** This top-to-bottom deep dive helps identify potential problems with the title before the policy is issued.  \n* **Step 3:** **The policy is issued once you** [close on the home](/home-buying/articles/closing-on-a-house/)**.** After the title search is complete and any issues are resolved, the policy takes effect.",{"title":922,"content":923}," Choosing a title insurance provider","Need help finding a title insurance company? Don’t sweat it. \n\n::content-table{:tableData='[{\"row\":[{\"column\":\"FACTORS TO CONSIDER\"},{\"column\":\"TOP NATIONAL PROVIDERS\"}]},{\"row\":[{\"column\":\"Company reputation\"},{\"column\":\"First American Title\"}]},{\"row\":[{\"column\":\"Pricing\"},{\"column\":\"Fidelity National Title\"}]},{\"row\":[{\"column\":\"Customer service\"},{\"column\":\"Old Republic Title\"}]},{\"row\":[{\"column\":\"Lender recommendations\"},{}]}]'}\n::",{"title":925,"hideTitle":27,"content":926},"Title insurance FAQs","\n\n::faq{headline=\"Title insurance FAQs\" :faqs='[{\"question\":\"What is home title insurance and why do I need it?\",\"answer\":\"Home title insurance acts as your financial shield against legal disputes over property ownership. It ensures that you’re the rightful owner of the property and helps clean up messes that can bubble up from past ownership issues like paperwork errors, liens or fraudulent documentation. \"},{\"question\":\"What does home title insurance cover?\",\"answer\":\"Home title insurance typically covers you for issues like title defects, forged documents, undisclosed heirs and legal fees associated with defending your ownership rights. \"},{\"question\":\"How much does home title insurance cost?\",\"answer\":\"Title insurance is a one-time payment made at closing, usually ranging from 0.5% to 1.0% of the home's purchase price. According to Fannie Mae, the average cost is about 0.42% of the home's value. The exact amount will vary based on the property's value and location.\"},{\"question\":\"Who pays for title insurance, the buyer or the seller?\",\"answer\":\"The responsibility to pay for title insurance can vary depending on state laws and terms of sale. In some states, the seller is required to cover the cost, while in others, it’s the buyer's responsibility. This can also be negotiated as part of the purchase agreement, so it’s important to explore all your options and understand the specific requirements in your area.\"},{\"question\":\"What is the difference between owner’s and lender’s title insurance?\",\"answer\":\"Owner’s title insurance shields the home buyer from ownership disputes, while lender’s title insurance safeguards the mortgage lender’s interest in the property. These are different policies and would only provide payouts to the respective policyholder, either the owner or the lender.\"}]'}\n::","2025-04-16T13:55:00.000Z","A home isn’t just where you hang your hat; it’s a huge financial investment that needs protection. Home title insurance is part of the [closing process](/home-buying/articles/closing-on-a-house/) ensuring you have an undisputed claim on your house. It shields mortgage lenders and homeowners from losses if property ownership comes into question. We’ll go over why it matters and how title insurance helps you mark your territory during the [home-buying process](/home-buying/).","What is title insurance?",[713,714,681],{"introText":932,"body":933,"text":685,"to":686},"Need some clarity on title insurance?","We can help you get the answers you need.",{"title":935,"description":936},"What Is Home Title Insurance?","Protect your home investment with title insurance. Learn what home title insurance is, its costs, and who pays for it.","content:articles:home-buying:title-insurance.json","Title Insurance","articles/home-buying/title-insurance.json",[725,729,733],{"_path":942,"_dir":681,"_draft":6,"_partial":6,"_locale":7,"readTime":739,"l1":681,"linkNav":943,"heroMedia":945,"teaserImage":948,"slug":950,"disclosure":99,"sections":951,"date":973,"subheadline":974,"headline":975,"dateModified":976,"isFeatured":6,"tags":977,"link":978,"seo":981,"hasSectionNavigation":27,"_id":984,"_type":78,"title":985,"_source":80,"_file":986,"_extension":78,"tagsDetails":987},"/articles/home-buying/what-is-mortgage-protection-insurance",{"introText":684,"text":685,"to":686,"ariaLabel":944},"N/A",{"landscape":946,"portrait":947},"/media/article-what-is-mpi-mobile-768x512.jpg","/media/article-what-is-mpi-desktop-520x638.jpg",{"src":949},"/media/article-what-is-mpi-teaser-500x500.jpg","what-is-mortgage-protection-insurance",[952,955,958,961,964,967,970],{"title":953,"hideTitle":6,"content":954},"Understanding mortgage protection insurance","A mortgage comes with a laundry list of insurance policies to consider, so let’s examine exactly what mortgage protection insurance is and what it can do for you. If you’re feeling a little lost in the mortgage world, dip a toe into our [beginner's guide to loan basics](/home-loans/articles/what-is-a-mortgage/).\n\n### Definition and purpose\n\nWhat is mortgage protection insurance (MPI)? MPI is a type of insurance policy designed to help with the mortgage payments if you pass away, become disabled or lose your job. Think of it as mortgage payment protection, helping to provide peace of mind as a homeowner and financial security for your family if the unexpected happens.\n\n**Who does it benefit?**\n\n**You:** If you become disabled or lose your job, MPI can help cover your mortgage payments, providing financial security during tough times. \n\n**Your family:** MPI helps pay the mortgage if you pass away, allowing your family to stay in your home without additional financial burdens.  \n\n### How it differs from other insurance types\n\nFrom [homeowners insurance](/home-buying/articles/what-is-homeowners-insurance/) to [title insurance](/home-buying/articles/title-insurance), it’s easy to mix up the different types of financial protection—especially when MPI is sometimes called“life insurance for mortgages.” Let’s clear things up by taking a closer look at three often confused types: MPI, [private mortgage insurance (PMI)](/home-buying/articles/mortgage-insurance/) and life insurance.  \n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Insurance type\"},{\"value\":\"Is it required?\"},{\"value\":\"How does it work?\"}]' :rows='[{\"column\":{\"valueOne\":\"Mortgage protection insurance (MPI)\",\"valueTwo\":\"No, voluntary insurance to help protect homeowner and loved ones\",\"valueThree\":\"Helps with mortgage payments if homeowner dies, becomes disabled or loses employment\"}},{\"column\":{\"valueOne\":\"Private mortgage insurance (PMI)\",\"valueTwo\":\"Yes, typically required to help protect lenders if down payment is less than 20%\",\"valueThree\":\"Helps protect the lender if homeowner defaults on the mortgage\"}},{\"column\":{\"valueOne\":\"Life insurance\",\"valueTwo\":\"No, voluntary insurance to help protect loved ones\",\"valueThree\":\"Pays a lump sum to beneficiaries that can be used for anything, including the mortgage\"}}]'}\n::",{"title":956,"content":957},"Types of mortgage protection insurance","Let’s break it down even further into the two distinct types of MPI, which differ in structure and cost.\n\n### Level-term insurance\n\nThis option provides a fixed amount of coverage for a specified period, typically the length of your mortgage. The premium remains steady throughout the term, helping to make household budgeting easier. If you want consistent coverage and predictable costs, level-term insurance might be for you.\n\n### Decreasing-term insurance\n\nThis type of MPI offers coverage that decreases over time, usually in lockstep with your mortgage balance. The premium stays the same, but the coverage amount decreases as you pay down your mortgage. This type of policy can cost less than level-term insurance.\n\n::tip{icon=\"Bulb\" title=\"Pro TIp\" text=\"Juggling your mortgage costs can feel like a full-time job. Cut out some of the hassle by using your [escrow](/home-buying/articles/what-is-escrow/) account to pay your insurance premiums automatically.\"}\n::",{"title":959,"content":960},"Benefits of mortgage protection insurance","Let’s dive deeper into how home loan protection insurance helps you and the people you love. \n\n### Financial security for your family\n\nIf you pass away, mortgage protection insurance helps your loved ones cover the mortgage, which helps to take at least one burden off their shoulders. Even when you aren’t around, MPI can help to ensure your home remains a safe, stable environment for your loved ones.\n\n### Peace of mind for homeowners\n\nIt helps to provide a sense of security, allowing you to focus on your family and your financial health without fixating on the “what ifs.”",{"title":962,"content":963},"Costs associated with mortgage protection insurance","Home loan insurance isn’t one-size-fits-all. Several factors will determine your premium price tag.   \n\nFactors influencing premiums \n\n* **Age and health:** Younger folks in good health tend to pay lower premiums. \n* **Coverage amount:** The bigger [the mortgage](/calculators/monthly/), the higher the premium. \n* **Policy term:** Longer policy terms typically mean higher premiums. \n* **Type of policy:** Level-term insurance usually has higher premiums than decreasing-term insurance.\n\n::callout{title=\"Average cost estimates in action\" :body='\"\\nOn average, you can expect to pay between $20 and $50 per month on a policy that covers a $200,000 mortgage.\"' :media='{\"landscape\":\"/media/mobile-719x300-1-.jpg\",\"portrait\":\"/media/desktop-327x245.jpg\"}'}\n::",{"title":965,"content":966},"How to choose the right policy","As always, the policy you choose depends on your personal needs and financial circumstances.\n\n### Assessing your financial situation \n\nTake a look at your income, expenses and current insurance policies. Next, determine how much coverage you need and whether a level-term or decreasing-term is the better choice for you. Consulting a financial advisor can help you make the most informed decision. \n\n### Comparing different providers \n\n* **Research providers:** Look for reputable insurance companies with solid reviews. \n* **Compare quotes:** Get quotes from multiple providers to find the best rate. \n* **Read the fine print:** Familiarize yourself with the terms and conditions of the policy, including any exclusions or limitations.",{"title":968,"content":969},"Common myths and misconceptions","Let’s clear up common points of confusion. \n\n### Mortgage protection insurance vs. private mortgage insurance (PMI) \n\nMortgage protection insurance vs. MPI is a common topic in the home loan arena. To recap, mortgage protection insurance is optional coverage that helps with mortgage payments in the face of death, disability or unemployment. In contrast, private mortgage insurance can be required by lenders if you put down less than 20%, and it only protects the lender (not homeowners) if you default.   \n\n### Necessity for all homeowners \n\nSome people believe that MPI is necessary only for those with young families or high-risk jobs. The truth is, MPI is a good idea for any homeowner who wants mortgage support in the event of unforeseen financial hardships. It helps protect your peace of mind and the people you love.",{"title":971,"hideTitle":27,"content":972}," Frequently asked questions","::faq{headline=\"Mortgage Protection Insurance FAQs\" :faqs='[{\"question\":\"Is mortgage protection insurance mandatory?\",\"answer\":\"No, mortgage protection insurance is an optional policy that helps with mortgage payments if a policyholder faces death, disability or job loss.\"},{\"question\":\"Can I transfer my policy if I refinance?\",\"answer\":\"Yes, you can often transfer your MPI policy if you refinance. However, double-check with your insurance provider to understand the specific terms and conditions of your policy.\"},{\"question\":\"What happens if I sell my home?\",\"answer\":\"MPI typically ends when you sell your home. However, you may have options to transfer the policy to a new home or use any remaining coverage for other purposes. Check in with your insurance provider to figure out what’s possible.\"}]'}\n::","2025-04-14T12:49:00.000Z","You know that old saying, “Life is what happens when you’re busy making other plans”? Well, mortgage protection insurance (MPI) is one contingency plan that helps you stay afloat when life takes an unexpected turn. This insurance for mortgages covers your house payments if you face financial hardship due to unforeseen circumstances like disability or job loss, or if you pass away. While we hope you and your loved ones never need to lean on MPI, it’s wise to cover your bases on the off chance “what ifs” turn into “oh nos.”","Mortgage protection insurance: what you need to know","2026-06-02T13:44:00.000Z",[713,681],{"introText":979,"body":980,"text":685,"to":686},"Is mortgage protection insurance right for you?","Let’s look at the pros and cons together.",{"title":982,"description":983},"What is Mortgage Protection Insurance (MPI)?","Learn about how Mortgage Protection Insurance (MPI) ensures your mortgage is covered in case of death, disability, or job loss and if it is right for you.","content:articles:home-buying:what-is-mortgage-protection-insurance.json","What Is Mortgage Protection Insurance","articles/home-buying/what-is-mortgage-protection-insurance.json",[729,733],{"_path":989,"_dir":681,"_draft":6,"_partial":6,"_locale":7,"readTime":739,"l1":681,"linkNav":990,"heroMedia":991,"teaserImage":994,"slug":996,"sections":997,"date":1013,"subheadline":1014,"headline":1015,"isFeatured":6,"tags":1016,"link":1017,"seo":1020,"hasSectionNavigation":27,"_id":1023,"_type":78,"title":1024,"_source":80,"_file":1025,"_extension":78,"tagsDetails":1026},"/articles/home-buying/what-is-homeowners-insurance",{"introText":684,"text":685,"to":686},{"landscape":992,"portrait":993},"/media/article-what-is-homeowners-insurance-mobile-768x512.jpg","/media/article-what-is-homeowners-insurance-desktop-520x638.jpg",{"src":995},"/media/article-what-is-homeowners-insurance-teaser-500x500.jpg","what-is-homeowners-insurance",[998,1001,1004,1007,1010],{"title":999,"content":1000},"How does homeowners insurance work?","Not to be confused with [mortgage insurance](/home-buying/articles/mortgage-insurance), homeowners insurance coverage helps you recover if things ever go south (fingers crossed they don’t, of course). It’s essentially a policy that provides reimbursement if one of the covered casualties causes damage under an event listed in the policy, also known as claims. You pay them a little bit every year and, in return, they promise to help foot the bill. Let’s break it down further:\n\n1. **Something goes wrong:** Say a storm damages your roof or a pipe bursts in your home.\n2. **File a claim:** You let your insurance company know what happened. \n3. **Assessment:** They'll send over an adjustor who'll check out the damage and figure out how much it'll cost to fix things up.\n4. **Getting paid:** After the adjustor does their thing, the insurance company will send out a check. This usually goes to both you and your mortgage lender, so you can start on the repairs.\n\n::tip{icon=\"Bulb\" title=\"Pro Tip\" quote=\"Homeowners insurance can also get you coverage for your personal property. This is generally a fixed dollar amount or a percentage of the building value. Jewelry and other valuables such as antiques or artwork, may need their own separate policy, called a schedule.\" text=\"Homeowners insurance can also get you coverage for your personal property. This is generally a fixed dollar amount or a percentage of the building value. Jewelry and other valuables such as antiques or artwork may need their own separate policy, called a schedule.\"}\n::",{"title":1002,"content":1003},"Is homeowners insurance required?","Wondering if you need homeowners insurance? If you're taking out a [mortgage](/home-loans/articles/what-is-a-mortgage), the answer is definitely yes. Your lender will insist on it and will also want to be included in your policy through something called a \"[mortgagee clause.](/home-buying/articles/mortgagee-clause)\" This clause ensures that if something happens to your home, either the damage gets repaired, or the insurance payout goes towards reducing your mortgage balance. It's a safeguard for the lender to protect their investment in your property.\n\nNow, if you own your home outright—no mortgage or loans—then it's all up to you. You can choose whether to buy insurance or not. Think about it this way: would you rather pay an annual insurance premium, or would you prefer to risk having to pay out of pocket for any potential damages yourself? It's a decision that weighs the cost of the premium against the risk of having to cover any losses on your own.",{"title":1005,"content":1006},"What is covered by homeowners insurance? ","So, what exactly does homeowners insurance cover? It's important to know, but remember, you'll need to check your own policy for the specifics because coverage can vary. Generally, a standard policy takes care of the basics, but be aware—there are exceptions. For instance, most policies won't cover flood damage or forest fires. If you live somewhere where these are real risks, you might want to chat with your insurance agent about getting additional coverage.\n\nLet’s hope you never have to use it, but here’s the lowdown in case you do:\n\n* **Dwelling coverage:** Pays for damage to the house and attached structures, such as garages.\n* **Other structures**: Covers structures on your property not attached to your house, like fences and sheds.\n* **Personal property**: Provides coverage for your belongings inside the home, like furniture and electronics, against theft or damage.\n* **Loss of use**: Covers additional living expenses if your home is uninhabitable due to a covered loss.\n* **Personal liability**: Protects you if someone is injured on your property.\n* **Medical payments**: Covers medical expenses if someone is injured on your property. These coverages are standard with most homeowners insurance policies, but it's important to review yours carefully for any exclusions, exceptions or additional coverages.",{"title":1008,"content":1009},"Homeowners Insurance vs Home Warranty","Homeowners insurance and home warranties both provide protection for homeowners, but they cover different types of risks and damages. Here’s a breakdown of the key differences:\n\n::inline-table{tableLayout=\"basic\" :rows='[{\"column\":{\"valueOne\":\"Purpose\",\"valueTwo\":\"To protect against financial loss from accidents, natural disasters, theft and other unforeseen events.\",\"valueThree\":\"To cover the cost of repairing or replacing major home systems and appliances due to wear and tear.\"}},{\"column\":{\"valueOne\":\"Coverage\",\"valueTwo\":\"Covers the structure of the home, personal belongings, liability for injuries occurring on the property and sometimes living expenses during home repairs.\",\"valueThree\":\"Covers specific home components like HVAC systems, plumbing, electrical systems and appliances like refrigerators and ovens.\"}},{\"column\":{\"valueOne\":\"Duration\",\"valueTwo\":\"Typically renewed annually.\",\"valueThree\":\"Usually have annual contracts that can be renewed.\"}},{\"column\":{\"valueOne\":\"Cost\",\"valueTwo\":\"Based on the value of the home, location and chosen deductible and policy details.\",\"valueThree\":\"Based on the coverage plan and optional add-ons.\"}},{\"column\":{\"valueOne\":\"Claim Process\",\"valueTwo\":\"Involves filing a claim with the insurance company after an incident. The company assesses the damage and pays out accordingly, minus any deductible.\",\"valueThree\":\"Involves requesting service when a covered item breaks down. The warranty company sends a technician to fix or replace the item, often for a service fee.\"}},{\"column\":{\"valueOne\":\"Mandatory\",\"valueTwo\":\"Often required by mortgage lenders.\",\"valueThree\":\"Optional and not required by lenders.\"}}]' :headers='[{\"value\":\"\"},{\"value\":\"Homeowners Insurance\"},{\"value\":\"Home Warranty\"}]'}\n::",{"title":1011,"content":1012,"hideTitle":27},"Homeowners insurance FAQs","::faq{headline=\"Homeowners insurance FAQs\" :faqs='[{\"question\":\"How long are home insurance policies in effect?\",\"answer\":\"Home insurance policies are generally renewed annually. Renewal time is a perfect moment to think about major updates you’ve done to the home or expensive purchases you've made. You may need to adjust your coverage to ensure the coverage is sufficient.\"},{\"question\":\"Do I need homeowners insurance for a rental property?\",\"answer\":\"Congrats on that landlord status. When you're renting out property, standard homeowners insurance might not cover all the bases. Instead, look into landlord insurance. It’s designed just for rental properties and the unique situations that can arise with tenants. It helps protect you from financial losses related to rental activities—a lifesaver if things go sideways. Landlord insurance generally includes coverage for property damage, lost rental income and liability protection. If your tenants throw a pool party and things get out of hand, no sweat—you're covered. Yes, it's an extra step, but securing the right insurance means you can relax and enjoy your place in the sun with a little more peace of mind.\"}]'}\n::","2024-10-02T17:34:00.000Z","The all-important homeowners insurance financially protects you and your home against unexpected casualties. Whether it's a natural disaster or other mishaps, this coverage has your back, protecting both you and your cozy haven.","What is homeowners insurance?",[713,714,681],{"introText":1018,"text":685,"to":686,"body":1019},"Questions on when to get homeowners insurance?","Let's chat through it together. ",{"title":1021,"description":1022},"What is Homeowners Insurance?","Learn what homeowners insurance is and the key aspects of home insurance coverage to protect your property. Understand what's included in a standard policy.","content:articles:home-buying:what-is-homeowners-insurance.json","What Is Homeowners Insurance","articles/home-buying/what-is-homeowners-insurance.json",[725,729,733],{"_path":1028,"_dir":681,"_draft":6,"_partial":6,"_locale":7,"readTime":739,"l1":681,"linkNav":1029,"heroMedia":1030,"teaserImage":1033,"outro":7,"slug":1035,"sections":1036,"date":1066,"subheadline":1067,"headline":1068,"isFeatured":6,"tags":1069,"link":1071,"seo":1074,"hasSectionNavigation":27,"_id":1077,"_type":78,"title":1078,"_source":80,"_file":1079,"_extension":78,"tagsDetails":1080},"/articles/home-buying/pmi-home-loan",{"introText":684,"text":685,"to":686},{"landscape":1031,"portrait":1032},"/media/article-what-is-private-mortgage-insurance-mobile-768x512.jpg","/media/article-what-is-private-mortgage-insurance-desktop-520x638.jpg",{"src":1034},"/media/article-what-is-private-mortgage-insurance-teaser-500x500.jpg","pmi-home-loan",[1037,1039,1042,1045,1048,1051,1054,1057,1060,1063],{"title":805,"content":1038,"hideTitle":27},"Disclaimer: Citi may have different eligibility criteria and/or product offerings than those mentioned on mortgage.com.",{"title":1040,"content":1041},"What is private mortgage insurance (PMI)? ","So, you’re ready to find a place to call your own but can’t quite afford that 20% [down payment](/home-buying/articles/how-much-down-payment-for-a-house). PMI to the rescue! Private mortgage insurance is a type of insurance that lenders require when you put less than 20% down on your home’s purchase price. PMI works like a safety net for lenders on the off chance you don’t make the mortgage payments. While PMI increases the monthly bill, it helps make homeownership more attainable for lots of buyers. It can also kick in when you’re [refinancing](/refinancing) and you have less than 20% in home equity.\n\n### Is PMI required for every mortgage loan type?\n\nPMI is typically connected with [conventional mortgage loans ](/home-loans/conventional-loan)and [FHA loans.](/home-loans/fha-loan) \n\n### PMI vs. MIP vs. MPI\n\nYou’ve heard about PMI, but how does this compare to other insurance types that may apply to other scenarios? It’s easy to get lost in the acronym shuffle, so let’s break down the differences.\n\n::inline-table{tableLayout=\"basic\" :headers='[{\"value\":\"Insurance Type\"},{\"value\":\"Associated With\"},{\"value\":\"Purpose\"}]' :rows='[{\"column\":{\"valueOne\":\"PMI (Private Mortgage Insurance)\",\"valueTwo\":\"Conventional loans & FHA loans\",\"valueThree\":\"Protects the lender if the borrower defaults on the loan when the down payment is less than 20%\",\"valueFour\":\"Required when down payment is less than 20%\"}},{\"column\":{\"valueOne\":\"MIP (Mortgage Insurance Premium)\",\"valueTwo\":\"FHA loans\",\"valueThree\":\"Protects the lender, linked specifically to FHA loans when the down payment is less than 10%\",\"valueFour\":\"Required when down payment is less than 10%\"}},{\"column\":{\"valueOne\":\"MPI (Mortgage Protection Insurance)\",\"valueTwo\":\"Optional for any homeowner or loan type\",\"valueThree\":\"Covers mortgage payments in case of the borrower's death or disability\",\"valueFour\":\"Optional, not tied to loan type\"}}]'}\n::",{"title":1043,"content":1044},"How much does PMI cost?","So, how much is mortgage insurance? For a conventional loan, on average, PMI costs range from 0.3% to 1.5% of the original loan amount per year. This means if you have a $200,000 loan, you could be paying anywhere from $600 to $3,000 annually for PMI. Yes, that’s a pretty big difference, so you’ll want to know how PMI will impact your mortgage payments before you agree to a lender.",{"title":1046,"content":1047,"hideTitle":27},"PMI in action","::callout{title=\"PMI in action\" body=\"Imagine you buy a home priced at $250,000 and you put down 10%, which is $25,000. This leaves you with a mortgage of $225,000. If your PMI rate is 0.5%, your annual cost for PMI would be $1,125. This breaks down to an additional $93.75 in your monthly mortgage payment.\" :media='{\"landscape\":\"/media/mobile-719x300-1-.jpg\",\"portrait\":\"/media/desktop-327x245.jpg\"}'}\n::",{"title":1049,"content":1050},"Factors that impact the cost of PMI","Several factors can tweak the cost of your PMI mortgage loan payments:\n\n* **Loan amount and term**: Larger loans and longer terms can mean higher PMI costs. \n* **Down payment**: The more you put down, the less risky you are to lenders and the lower your PMI costs will be.\n* **Credit score**: Higher [credit scores](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house) can lead to lower PMI payments because they indicate that you're a reliable borrower.\n* **Loan type**: [Fixed-rate loans](/home-loans/fixed-rate) might offer lower PMI rates compared to [adjustable-rate mortgages](/home-loans/adjustable-rate), which can be a bigger risk for lenders.",{"title":1052,"content":1053},"Types of private mortgage insurance","There are several types of private mortgage insurance that vary based on who is required to pay and when they should pay it. \n\n### Borrower-paid PMI\n\nThis is the most common type of PMI where you pay the mortgage insurance premium as part of your monthly mortgage payment.\n\n**Best for**: Borrowers who plan to stay in their home for a long period and want to spread the cost of PMI across the life of the loan.\n\n### Lender-paid PMI\n\nIn this case, the lender pays the PMI premium, which often means a higher interest rate on your loan.\n\nBest for: Borrowers who want to minimize their upfront costs and plan on refinancing or selling the home before the mortgage reaches its midpoint.\n\n### Single-premium PMI\n\nThis is where you pay a one-time upfront premium at closing, or you may be able to divide it between monthly payments.\n\n**Best for**: Borrowers who have extra cash to spend upfront, which eliminates the need for monthly PMI payments.\n\n### Split-premium PMI\n\nThis is a middle-of-the-road deal that allows you to pay part of the PMI upfront and divvy up the remaining balance between monthly payments.\n\n**Best for**: Borrowers who can afford some upfront payment but also want to keep their monthly mortgage payments lower.",{"title":1055,"content":1056},"Should you pay PMI?","Paying PMI isn't necessarily a bad thing. It can help you buy a home sooner without having to save for a 20% down payment. However, it does increase your mortgage costs overall. Consider whether the extra expense of PMI is manageable for you in the short term or if it might be more beneficial to delay your home purchase while you save for a larger down payment.",{"title":1058,"content":1059},"Is there a way to avoid paying PMI?","Trying to sidestep PMI? We get it. Here are a few strategies that can help:\n\n1. **20% down payment**: Meet the 20% threshold to take PMI out of the equation.\n2. **Piggyback loan**: Take out a smaller loan to cover part of your down payment, avoiding PMI on your primary mortgage.\n3. **Down payment assistance programs**: Look for programs that help you meet the 20% down payment requirement.\n4. **[Government-backed loans](/home-buying/articles/government-backed-home-loans)**: Find out if you qualify for a loan that doesn’t require PMI.\n5. **Lender-paid PMI**: If you can negotiate a good interest rate, lender-paid PMI may be the best route.",{"title":1061,"content":1062},"When can I get rid of PMI?","One thing to remember is that PMI isn't a forever fee. Once you’ve built up 20% in home equity, you can request to remove PMI. Your lender will typically require a good payment history and possibly a new [appraisal](/home-buying/articles/home-appraisal) to confirm your home’s value. This may differ with FHA loans.\n\n::tip{icon=\"Bulb\" title=\"PRO TIP\" text=\"Under the Homeowners Protection Act, your lender is required to automatically remove PMI when your mortgage balance hits 78% of the original value, assuming you're current on your payments. The only exception to this is with an FHA loan.\"}\n::",{"title":1064,"content":1065,"hideTitle":27},"Private mortgage insurance FAQs","::faq{headline=\"Private mortgage insurance FAQs\" :faqs='[{\"question\":\"How do I make PMI payments?\",\"answer\":\"Most commonly, PMI costs are factored into your monthly mortgage payment and don’t require a separate bill. Some lenders also offer options for upfront payments or a combination of upfront and monthly payments. Check with your lender to see what you can make happen.\"},{\"question\":\"Do lenders require PMI?\",\"answer\":\"Yes, mortgage lenders usually require PMI for conventional loans when your down payment is less than 20%. It's their safety net if things go sideways and payments stop coming in. Remember, PMI isn’t the only mortgage insurance type. Every loan type has its own rules and policies. \"},{\"question\":\"Is PMI tax-deductible?\",\"answer\":\"PMI may have its moments in the tax-deductible spotlight, depending on the whims of tax laws. Recently, if you fit into certain income brackets and itemize your deductions, you might just get a break on PMI. However, tax rules are finnicky. Talk to your tax advisor regarding your specific situation on whether PMI will be tax deductible.\"},{\"question\":\"What’s the difference between mortgage insurance and homeowners insurance?\",\"answer\":\"While both types of insurance play a part in homeownership, they serve different purposes: one looks out for your lender, and the other shields you and your home financially from unexpected woes. Mortgage insurance is for the lender in case you default on your loan. Homeowners insurance helps protect you financially from damages to your home and personal property.\"}]'}\n::","2024-10-01T15:36:00.000Z","Navigating the world of home loans can sometimes feel like trying to solve a Rubik's Cube. Let’s decode one piece of the puzzle that can be a game-changer for hopeful homeowners: private mortgage insurance (PMI). We’ll go over what PMI is, how it works and whether it's something you'll need on your way to homeownership.","PMI home loan: what it is and how it works",[713,1070,681],"real-estate-process",{"introText":1072,"text":685,"to":686,"body":1073},"Still have questions about PMI?","We'll walk you through the ins and outs of this type of mortgage insurance.",{"title":1075,"description":1076},"What is Private Mortgage Insurance (PMI)?","Find out what Private Mortgage Insurance (PMI) is, how it impacts your home loan, and the costs involved. Understand the role of PMI in the mortgage process.","content:articles:home-buying:pmi-home-loan.json","Pmi Home Loan","articles/home-buying/pmi-home-loan.json",[1081,729,733],{"label":1082,"slug":1070,"seo":1083},"Real Estate Process",{"description":1084},"Learn more about real estate process with helpful articles, tools, and guides to support your homeownership journey.",{"_path":1086,"_dir":681,"_draft":6,"_partial":6,"_locale":7,"readTime":1087,"l1":681,"linkNav":1088,"heroMedia":1089,"teaserImage":1092,"slug":1094,"sections":1095,"date":1120,"subheadline":1121,"headline":1122,"dateModified":1123,"isFeatured":6,"tags":1124,"link":1126,"seo":1129,"hasSectionNavigation":27,"_id":1132,"_type":78,"title":1133,"_source":80,"_file":1134,"_extension":78,"tagsDetails":1135},"/articles/home-buying/apr-vs-interest-rate",8,{"introText":684,"text":685,"to":686},{"landscape":1090,"portrait":1091},"/media/article-apr-vs.-interest-rate-mobile-768x512.jpg","/media/article-apr-vs.-interest-rate-desktop-520x638.jpg",{"src":1093},"/media/article-apr-vs.-interest-rate-teaser-500x500.jpg","apr-vs-interest-rate",[1096,1099,1102,1105,1108,1111,1114,1117],{"title":1097,"content":1098},"Is APR the same  as the  interest rate? ","A  mortgage’s  interest rate  and APR are both super important for getting a clear picture of the  total  cost of a loan, but they  represent  different  aspects. Your mortgage interest rate is the percentage of the loan amount you pay to borrow, but your APR is a more holistic view of the full annual cost of borrowing. It includes the interest rate plus any extra fees. Here’s a quick chart to help you understand what each term really means and how  it affects your loan: \n\n::inline-table{tableLayout=\"basic\" :rows='[{\"column\":{\"valueOne\":\"Definition\",\"valueTwo\":\"The cost the bank or lender charges to borrow money, expressed as a percentage. \",\"valueThree\":\"A representation of the full cost of borrowing, also expressed as a percentage.\"}},{\"column\":{\"valueOne\":\"Includes\",\"valueTwo\":\"Only the interest charges on the loan.\",\"valueThree\":\"Interest charges plus other costs associated with the loan, such as lender fees, certain closing costs and mortgage points.\"}},{\"column\":{\"valueOne\":\"Purpose\",\"valueTwo\":\"To determine the cost of borrowing the principal loan amount.\",\"valueThree\":\"To give you a more comprehensive view of the cost of the loan.\"}},{\"column\":{\"valueOne\":\"Use\",\"valueTwo\":\"Understand how much you’ll pay in interest\",\"valueThree\":\"Compare the total costs of loans, including fees and other loan-related charges from 2 or more lenders.\"}}]' :headers='[{\"value\":\"\"},{\"value\":\"Interest Rate\"},{\"value\":\"APR (Annual Percentage Rate)\"}]'}\n::",{"title":1100,"content":1101},"What is an interest rate?","Simply put, an interest rate is the cost you pay to borrow money, expressed as a percentage. You might see interest rates advertised by banks and lending groups as the headline figure for loans and mortgages.\n\n### Interest rates in action\n\n**Scenario**: You take out a $300,000 mortgage with an interest rate of 6% per year to be paid over 30 years. The interest rate is fixed and will not change over the 30-year term of the loan.\n\n::card{eyebrowIcon=\"\" body=\"Get the latest scoop on today’s rate trends.  \" imagePosition=\"top\" ctaType=\"text-arrow\" marginSize=\"small\" headline=\"Curious about what current Citi rates are?\" backgroundColor=\"\" icon=\"Homecheck\" link=\"/rates\" ctaText=\"Learn More\"}\n::\n\n**Monthly payments**: Using a [mortgage calculator](/calculators/monthly/), we can determine that your monthly payment would be approximately $1,799.\n\n**How payments are split**: Every month, your payment is divided into principal (the cost of the mortgage) and interest (the fee you pay for borrowing). The interest for the first month is calculated as 6% of $300,000, divided by 12 months, which equals about $1,500. So, of your $1,799 payment, $1,500 goes toward interest, and the remaining $299 reduces your principal.\n\n**Subsequent payments**: In the second month, your new principal is $299,701 ($300,000 - $299). The interest for this month is calculated on the new principal, which would be slightly less than the first month's interest. Therefore, a slightly larger portion of your second payment goes toward reducing the principal. \n\n**Long-term impact**: This process continues each month, gradually decreasing the interest portion and increasing the principal portion of your payment until the loan is paid off. This is often referred to as an [amortization schedule](/calculators/amortization/).",{"title":1103,"content":1104},"What is an annual percentage rate (APR)?","The annual percentage rate is a measure of the cost of credit, expressed as a yearly rate. It goes a step further than the interest rate by including costs of a home loan, such as mortgage insurance, discount points, loan origination fees and other loan-related charges. The APR is also expressed as a percentage and provides a more comprehensive look at the cost of a loan.",{"title":1106,"content":1107},"Understanding the difference between interest rate and APR","When you’re looking at loans, a low interest rate might seem like the best deal. But let’s take a closer look—there's more to the story when it comes to APR.  \n\nImagine you have two loan options:  \n\n* Loan A has a lower interest rate but comes with higher fees\n* Loan B has a higher interest rate but lower fees  \n\nAt first glance, Loan A may appear more appealing due to its lower interest rate. However, because it has higher fees, it may have a higher APR. That might mean Loan B is actually the better deal in the long run. The APR provides a more comprehensive view by showing the total yearly cost of the loan, not just the interest rate.\n\nCiti makes it easy to review current [mortgage rates](/rates/) and understand how fees factor into the total cost of borrowing.",{"title":1109,"content":1110},"What determines the interest rate?","Interest rates are always on the move, so it's normal to see them go up and down while shopping around. There are several key factors that go into the specific rate you may be offered.\n\n1. **[Credit score](/home-buying/articles/what-credit-score-do-you-need-to-buy-a-house/):** Sporting strong credit can unlock lower interest rates, signaling to lenders that you’re a safe bet for timely repayments.\n2. **Loan amount and loan term:** Usually the interest rate for a loan will differ depending on the loan size and the loan term, meaning how long the loan is expected to take to pay off.\n3. **Current market conditions:** Inflation and economic growth play a major role in setting interest rates and affect whether they trend up or down. The rate set by the Federal Reserve, commonly known as the fed funds rate, reflects current market conditions. Changes in the fed funds rate influence the prime rate, or the interest rate lenders charge their most creditworthy borrowers. The prime rate can affect the cost of consumer products including mortgages.\n4. **Fixed vs. variable rates:** Interest rates come in two flavors: fixed and variable. While the rate of a [fixed rate mortgage](/home-loans/fixed-rate/) does not change during the term of the loan, the rate of a variable-rate loan, or an [adjustable-rate mortgage](/home-loans/adjustable-rate/), can change over time. To prevent these rates from changing too drastically, variable-rate loans have caps that limit how much the interest rate can increase or decrease, or a period where the rate stays fixed before it starts to vary, giving you some initial stability.  \n\nOther elements, such as the type of loan, your location, the type of property, the purpose of the loan and the loan-to-value ratio may also play critical roles in setting your interest rate.",{"title":1112,"content":1113},"How is APR calculated?","The APR is calculated by combining the interest rate with other costs, such as loan related [closing costs](/home-buying/articles/closing-costs) or [private mortgage insurance](/home-buying/articles/pmi-home-loan). These total costs are expressed as a yearly rate. The Truth in Lending Act requires lenders to disclose the APR, ensuring transparency so you can make an informed decision when comparing similar [loan programs](/home-loans).",{"title":1115,"content":1116},"How do I get a lower interest rate?","Typically, home buyers are on the hunt for the lowest interest rate they can find to make their monthly payments more affordable. There are a few ways you can increase your chances of locking in a lower rate.\n\n### Raise your credit score\n\nBoosting your credit is arguably the most direct way to influence the interest rates available to you. Making your payments on time, lowering your credit utilization ratio and limiting the number of hard credit checks on your report may help raise your score.\n\n### Get a government-backed loan\n\nBorrowers with lower credit scores or a lower down payment may find that [government-backed loans](/home-buying/articles/government-backed-home-loans/), like [FHA](/home-loans/fha-loan/) or [VA loans](/home-loans/va-loan/), have lower interest rates available compared to [conventional loans](/home-loans/conventional-loan/). These loans are insured by government agencies, meaning the lenders can offer lower rates because they’re taking on less risk.\n\n### Buy down the rate\n\nThe interest rate can be lowered by paying discount points. [Mortgage points](/rates/articles/what-are-mortgage-points) are a fee, that lowers the interest rate. One point typically costs 1% of the total loan amount and generally lowers the interest rate by 0.25%. The lower rate applies to the life of your fixed-rate loan.\n\n### Increase your down payment\n\nUpping your down payment can help lower your loan-to-value (LTV) ratio. That’s a fancy way of saying the percentage of your home's value that's covered by your loan. A lower LTV may help you snag a lower interest rate. So, making a larger upfront payment can pay off with smaller interest payments down the line.\n\n### Leverage relationship pricing programs\n\nSome lenders, like Citi, offer special pricing programs for existing customers. For example, Citi's [Mortgage Relationship Pricing](https://www.citi.com/mortgage/relationship-benefits) program offers closing cost discounts or a discount on the interest rate for new and existing Citi banking customers based on their Citi Eligible Balances. \n\n::content-table{headline=\"Citi Mortgage discount Relationship Pricing \" :tableData='[{\"row\":[{\"column\":\"Account balance \"},{\"column\":\"Closing credit or interest rate discount \"}]},{\"row\":[{\"column\":\"$1 - $49,999.99 \"},{\"column\":\"$500 off closing costs \"}]},{\"row\":[{\"column\":\"$50,000 - $199,999.99 \"},{\"column\":\"0.125% or 1/8% off interest rate\"}]},{\"row\":[{\"column\":\"$200,000 - $499,999.99 \"},{\"column\":\"0.125% or 1/8% off interest rate and $1,500 off Closing Costs\"}]},{\"row\":[{\"column\":\"$500,000 - $999,999.99 \"},{\"column\":\"0.25% or 1/4% off interest rate\"}]},{\"row\":[{\"column\":\"$1,000,000 - $1,999,999.99 \"},{\"column\":\"0.375% or 3/8% off interest rate\"}]},{\"row\":[{\"column\":\"$2,000,000 or more \"},{\"column\":\"0.5% or 1/2% off interest rate\"}]}]'}\n::\n\n[Important Terms & Conditions](https://www.citi.com/mortgage/relationship-benefits#importantDisclosures)",{"title":1118,"content":1119},"The final walkthrough: interest rate vs. APR","Getting a handle on the difference between APR and interest rate can be a game-changer when finding a great deal on your dream home. While the interest rate shows the basic cost of borrowing, the APR gives you a clearer picture of the total cost each year.  \n\nUnderstanding this distinction helps to ensure that you’re not just snagging a low rate, but also getting the most favorable overall terms for your mortgage.","2024-09-30T16:08:00.000Z","**Key insights:**  \n\n* APR and interest rate measure different costs of a mortgage: The interest rate reflects only the cost of borrowing  the principal, while APR (annual percentage rate) captures the full cost of the loan by including fees, points and certain closing costs \n* Compare specifics of loan offers, because a loan with a lower interest rate can still be more expensive overall if it comes with higher fees  \n* Borrowers may influence their interest rate by improving credit score, increasing the down payment, choosing government-backed loans or paying discount points to reduce the rate over time\n\nIf you’ve ever mixed up  your APR (annual percentage rate) and interest rate, you’re not alone. You may encounter these terms across multiple financial products, including mortgages. Let’s get into how APR and interest rate stack up against one another and how you can use them to measure the costs of buying a home.","Annual percentage rate vs. interest rate","2026-03-31T09:43:00.000Z",[1125,773],"rates",{"introText":1127,"text":685,"to":686,"body":1128},"Want to learn more about rates?","Let's chat through it together.",{"title":1130,"description":1131},"Annual Percentage Rate vs. Interest Rate | Mortgage.com","Learn the difference between interest rate vs APR, and how understanding your total mortgage cost can help you buy your dream home.","content:articles:home-buying:apr-vs-interest-rate.json","Apr Vs Interest Rate","articles/home-buying/apr-vs-interest-rate.json",[789,1136],{"label":13,"slug":1125,"seo":1137},{"description":1138},"Stay informed about rates. Explore market trends, rate factors, and tips to lock the best mortgage rate.",{"_path":1140,"_dir":681,"_draft":6,"_partial":6,"_locale":7,"readTime":1141,"l1":681,"linkNav":1142,"heroMedia":1143,"teaserImage":1146,"slug":1148,"sections":1149,"date":1165,"subheadline":1166,"headline":1167,"dateModified":1168,"isFeatured":6,"tags":1169,"leadGenLoanPurpose":7,"link":1170,"seo":1173,"hasSectionNavigation":27,"_id":1176,"_type":78,"title":1177,"_source":80,"_file":1178,"_extension":78,"tagsDetails":1179},"/articles/home-buying/mortgagee-clause",4,{"introText":684,"text":685,"to":686},{"landscape":1144,"portrait":1145},"/media/article-what-is-a-mortgage-clause-mobile-768x512.jpg","/media/article-what-is-a-mortgage-clause-desktop-520x638.jpg",{"src":1147},"/media/article-what-is-a-mortgage-clause-teaser-500x500.jpg","mortgagee-clause",[1150,1153,1156,1159,1162],{"title":1151,"content":1152}," What is a mortgagee?","First, a little legal vocabulary lesson. Before moving forward, there are two main terms you need to understand: mortgagee and mortgagor. The mortgagee is the lender that provides funds to someone buying property. The mortgagor is the person borrowing those funds (in this case, you).",{"title":1154,"content":1155},"What is a mortgagee clause?","A mortgagee clause is a specific section in your homeowners insurance policy that makes the lender a payee for the insurance payout—up to the amount you still owe on your mortgage—in the event that the property is majorly damaged or completely destroyed.  \n\n**Important to note:** The mortgagee clause does not necessarily apply for every small claim. Little Timmy tossing a baseball through your window will probably stay between you and your insurer. Tornado damage that makes your home unlivable, however, will likely trigger the clause. Check your homeowners insurance policy for specifics.\n\n### How does a mortgagee clause protect lenders? \n\nAs a mortgagor, you offer the title of your property as collateral when you take out a home loan. If you can’t make the payments and end up defaulting on your loan, the mortgagee has the right to foreclose on your home and sell it to make up any money you haven’t paid back. However, if the property is heavily damaged or destroyed and can’t be sold, foreclosure alone may not cover the lender’s loss. In that situation, the mortgagee clause helps protect the lender by ensuring insurance proceeds account for the remaining loan balance.  \nThe mortgagee clause also protects the lender from the decrease to the property’s value that could happen if you were to pocket an insurance payout without actually repairing the property or if you damaged the property on purpose.  \n\n### Does the mortgagee clause protect homeowners?\n\nRest assured, the mortgagee clause is in your best interest, too.  Even if your home is damaged so badly that it's unlivable, you’re still responsible for the remaining balance of your home loan. A mortgagee clause coordinates the insurance payout to help protect you from paying for a home you can’t live in or sell.  \n\n::tip{icon=\"Bulb\" title=\"Pro Tip\" text=\"If you get a notification that your mortgage lender has changed, you should call the lender to make sure the mortgagee clause on the insurance policy was assigned to the new lender.\"}\n::\n\nThe layer of security the clause offers also makes lending less risky for banks and other financial institutions, so borrowers like you can get a big enough loan to afford the perfect home.",{"title":1157,"content":1158},"How a mortgagee clause works","If you have homeowners insurance with a mortgagee clause, both you and your lender are financially protected if your home is destroyed by a covered claim such as:  \n\n* Fire and smoke\n* Wind and hail \n* Lightning strikes\n* Theft or vandalism\n* Personal liability if someone is injured on your property  \n\nLet’s hope none of this happens, but if it does, your insurance company will assess the damage, determine the payouts and settle up with you and your lender.  \n\nIn situations where it’s possible to fix the damage, your insurance company will likely send you a check to pay for the repairs. Usually, the check will list both you and the lender. If the insurance company issues the check directly to your lender, you’ll need to follow your lender’s instructions to access the funds and coordinate repairs.  \n\nIf the damage is irreparable, your lender will be first in line for the insurance payout. The insurance company would compensate your lender up to your remaining loan balance. Then, you’d receive a payout up to the amount of equity you have in the home and your mortgage debt would be wiped clean.  \n\n### Mortgagee clause example  \n\nLet’s pretend you buy a home for $500,000 with a $100,000 [down payment](/home-buying/articles/how-much-down-payment-for-a-house/), which makes your mortgage $400,000. You buy a $500,000 homeowners insurance policy to cover the total value of the home with a mortgagee clause in place.  \n\nLet’s say the home is destroyed by a fire right after you bought it. In this scenario, the insurance company would give your lender $400,000 to cover your remaining mortgage debt and pay you $100,000 to replace the home equity you lost.",{"title":1160,"content":1161},"How to get a mortgagee clause","Most lenders will require you to get a homeowners insurance policy with a mortgagee clause baked in.\n\n::tip{icon=\"Bulb\" title=\"Pro Tip\" text=\"If your lender doesn't require a mortgagee clause, you may still want to ask them to add one to your contract. If your property were to be unexpectedly damaged, you'd want the insurer—not your wallet—to cover the lender's losses.\"}\n::\n\n\nGetting a mortgagee clause is pretty smooth sailing. Before you can [close on a home](/home-buying/articles/closing-on-a-house/), most lenders ask you to secure a homeowners  insurance policy that includes a mortgagee clause. When setting up your policy, you’ll need to ask the insurance company to add a mortgagee clause to it. Be prepared to give the insurance company your lender’s details and loan number.",{"title":1163,"content":1164},"Components of a mortgagee clause","Here are some new terms you might stumble across in a mortgagee clause.  \n\n###  Lender protections  \n\n Lender protections are what the mortgagee clause is all about: the part that shields the lender from financial loss if the property is damaged or destroyed. These protections ensure the lender will recoup their losses from the insurance company, even if you deliberately damage the property.  \n\n### Loss payee  \n\nHere’s an easy one—loss payee is just another word for the mortgagee (in this case, the lender) that stands to receive the insurance company’s reimbursement. You might also hear mortgagee clauses referred to as “loss payee clauses.”  \n\n###  Its successors and/or assigns (ISAOA)  \n\n ISAOA stands for “its successors and/or assigns.” This phrase enables your lender to hand over their rights to another bank or financial institution. It comes into play if your lender decides to sell your loan on the secondary mortgage market. Not to worry, this is a common practice that helps lenders free up money to issue more loans and usually would not effect you as the the borrower.\n\n###  As their interests may appear (ATIMA)  \n\nThe sidekick to ISAOA is ATIMA, meaning “as their interests may appear.” This phrase lets the lender extend the insurance policy to third-party groups they do business with, even if they aren’t specifically named in the contract. So, if your lender sells the loan to a third party, they’ll also be shielded from financial loss.","2024-09-13T15:58:00.000Z","A mortgagee clause is a specific provision in your homeowners insurance policy that protects your lender in case of property damage.\n\n**Key insights:** \n\n* A mortgagee clause protects a lender if a home is seriously damaged\n* The clause usually applies to major losses, not small insurance claims\n* Knowing how it works can help avoid delays during insurance claims \n\nWhen you think of [homeowners insurance](/home-buying/articles/what-is-homeowners-insurance), you probably think of the financial protection that covers you, the homeowner, in case your property gets damaged. But did you know that lenders can piggyback on that protection by including a mortgagee clause in your insurance policy? We’ll walk you through the insurance jargon, so you can understand what mortgagee clauses do and where they fit into your homeowners insurance policy.","What is a mortgagee clause?","2026-04-10T09:10:00.000Z",[713,714,681],{"introText":1171,"text":685,"to":686,"body":1172},"Have questions about the home buying process? "," Citi is here to help you every step of the way.  ",{"title":1174,"description":1175},"What Is A Mortgagee Clause? | Mortgage.com","A mortgagee clause protects your lender from loss. See examples, learn how a mortgagee clause works and how to get one added to your home insurance policy. ","content:articles:home-buying:mortgagee-clause.json","Mortgagee Clause","articles/home-buying/mortgagee-clause.json",[725,729,733],{"_path":1181,"_dir":681,"_draft":6,"_partial":6,"_locale":7,"readTime":739,"l1":681,"linkNav":1182,"heroMedia":1183,"teaserImage":1186,"author":7,"outro":7,"slug":1188,"disclosure":99,"sections":1189,"date":1209,"subheadline":1210,"headline":1211,"dateModified":1212,"isFeatured":6,"tags":1213,"leadGenLoanPurpose":7,"link":1216,"seo":1219,"hasSectionNavigation":27,"_id":1222,"_type":78,"title":1223,"_source":80,"_file":1224,"_extension":78,"tagsDetails":1225},"/articles/home-buying/government-backed-home-loans",{"introText":684,"text":685,"to":686},{"landscape":1184,"portrait":1185},"/media/article-government-backed-home-loans-mobile-768x512.jpg","/media/article-government-backed-home-loans-desktop-520x638.jpg",{"src":1187},"/media/article-government-backed-home-loans-teaser-500x500.jpg","government-backed-home-loans",[1190,1191,1194,1197,1200,1203,1206],{"hideTitle":27,"title":805,"content":1038},{"title":1192,"content":1193},"Learning about government-backed home loans","So, you’re ready to [buy your first house](/home-buying/articles/first-time-home-buyer) and want to know more about your options. Government-backed loans can be a good place to start.\n\n### What are government-backed home loans?\n\nGovernment-backed loans are all about making that dream of homeownership more achievable—and affordable. They’re backed by federal agencies, which can help make lenders more likely to take a chance on you. That’s great news if your credit score isn’t high enough or you if you haven’t had a chance to save a bunch of cash for a big [down payment](/home-buying/articles/how-much-down-payment-for-a-house).\n\n::quote{icon=\"Mortgage\" quote=\"Government-backed loans are all about making that dream of homeownership more achievable—and affordable. They’re backed by federal agencies, which can help make lenders more likely to offer a loan.\"}\n::\n\n### Benefits of government home loans for first-time buyers\n\nGovernment-backed loans for first timers come with some nice benefits, setting them apart from [conventional loans](/home-buying/articles/va-loans-vs-conventional-loans-whats-the-difference) issued by financial institutions. These pluses include more flexible requirements for down payment, credit score and debt-to-income ratio. The specifics depend on the type of loan you’re talking about, so let’s dive in.",{"title":1195,"content":1196},"Types of government-backed home loans","There are two main types of government-backed loans: FHA loans and VA loans. They’re both here to make homeownership a little easier, especially if you’re buying your first home.\n\n::cta-card-grid{headline=\"\" :cards='[{\"ctaType\":\"arrow\",\"headline\":\"FHA loans\",\"body\":\"Backed by the Federal Housing Administration (FHA), these loans are an option for homeowners with lower credit scores. You can often get by with a score as low as 580 and a down payment as low as 3.5%. Just note, the lower the score, the higher the down payment requirement. That flexibility can help you land the starter home you’re looking for. \",\"link\":\"/home-loans/fha-loan\"},{\"ctaType\":\"arrow\",\"body\":\"If you’re a veteran, active service member or a surviving spouse, you’ll want to look into VA loans. Backed by the Department of Veterans Affairs (VA), these loans offer competitive interest rates, flexible credit score requirements and no down payment with a 100%  VA loan guarantee benefit. VA loans also don’t require private mortgage insurance (PMI).\",\"headline\":\"VA loans\",\"link\":\"/home-loans/va-loan\"}]' body=\"\"}\n::",{"title":1198,"content":1199},"Applying for government-backed home loans","There are a few hoops you’ll have to jump through to get the process rolling. Let’s break it down.\n\n### How to apply for an FHA loan?\n\nIf you think an FHA loan is right for you, the first step is checking that you meet all the basic requirements. If you check the boxes, the next step is to find an FHA-approved lender and work with them to get that “[preapproved](/home-loans/articles/how-to-get-pre-approved)” green light until it’s time to fill out an official loan application.\n\n### How to apply for a VA loan?\n\nWith a VA loan, you’ll need to meet specific service requirements and show that you qualify by getting a Certificate of Eligibility (COE) from the VA. So, your very first step is to request a COE from the Department of Veterans Affairs or a VA-approved lender. Once that’s squared away, you can move on to getting preapproved for your loan.",{"title":1201,"content":1202},"Tips for first-time home buyers","Buying a home—especially that very first one—can feel overwhelming. By keeping these three key points in mind, you can help your search go smoothly.\n\n**Be realistic about your budget**. It’s always fun to dream big, but it’s important to crunch the numbers and figure out what you can afford. Remember to factor in things like [closing costs](/home-buying/articles/closing-costs) along with your monthly mortgage payments.\n\n**Get preapproved for a mortgage**. [Preapproval](/home-loans/articles/how-to-get-pre-approved) can be your golden ticket to finding your dream home. You’ll get a better handle on how much you can borrow and a leg up on the competition when it comes time to make an offer.\n\n**Do your research**. [Home buyer programs](/home-buying/articles/first-time-home-buyer) can vary by state and by lender, so make sure you explore all the options available to you.\n\n**Look into down payment assistance**. Because you’re a first-time home buyer, you may be eligible for down payment assistance through your local or state housing authority, a nonprofit organization or the U.S. Department of Housing and Urban Development.",{"title":1204,"content":1205},"First-time home buyer programs","Wondering what else is out there for [first-time home buyers](/home-buying/articles/first-time-home-buyer)? Beyond government home loans for first-time buyers, there are different programs you can tap into to make your dream of a new place a reality.\n\n* **[Freddie Mac and Fannie Mae programs](/home-loans/home-ready-home-possible)**: Fannie Mae's HomeReady and Freddie Mac's Home Possible programs offer a pathway to homeownership with just 3% down payment, even for borrowers with less-than-ideal credit. Both require that applicants earn no more than 80% of the local median income, and both programs allow the use of gifts or grants to cover the down payment. How are these two options different? HomeReady requires a minimum credit score of 620, while Home Possible requires a minimum score of 660.\n* **State programs for first-time home buyers**: These programs vary based on what state you call home, but they can help with your down payment, closing costs, tax credits and more.\n* **Fixer-upper mortgages, a.k.a. renovation loans**: These loans allow buyers to purchase a home and roll the remodeling costs into their [mortgage](/home-buying/articles/apply-for-a-mortgage) with one convenient monthly payment.\n* [**Citi HomeRun**® **Mortgage**](/home-loans/home-run): This option can be perfect for first timers, even if you don’t have the best credit score. You can put down as little as 3%, you won’t have to pay for mortgage insurance and you’ll get a fixed interest rate so it’s easier to budget for monthly payments. This program is only available in select markets and may have income limitations. \n\n::disclaimer-dialog{buttonCopy=\"HomeRun Terms & Conditions\" :dialogCopy='\"## HomeRun Terms & Conditions\\n\\nHomeRun is available in Citibank assessment areas and specific census tracts in Arlington, VA, Atlanta, GA, Austin, TX, Cambridge, MA, Dallas, TX, Denver, CO, Frederick, MD, Houston, TX, Marietta, GA, Newark, NJ, New York, NY, Philadelphia, PA, San Jose, CA and Washington, D.C. Metropolitan Statistical Areas for loans on the primary residence of borrowers who qualify, and is also subject to income, property, product and other restrictions. To be eligible for up to 97% financing, the property must be a single-family home (including condos, co-ops and planned unit development) with a loan amount up to $806,500. Certain condo and co-op projects may be subject to lower LTVs. Single-family homes in certain high-cost markets with loan amounts between $806,501 and $1,209,750 are eligible for up to 95% financing. Non-traditional credit on conforming loan sizes requires 5% down payment. Non-traditional credit is not permitted on loans exceeding conforming loan limits. Two-unit properties are eligible for 89.99% financing with loan amounts up to $1,032,650, or 85% up to $1,548,975 in certain high-cost markets. In addition to home buying education, borrowers of two-unit properties must participate in landlord training from a Citi-approved community agency prior to closing. HomeRun is not available on cash-out refinance transactions.\"'}\n::",{"title":1207,"hideTitle":27,"content":1208},"Government-backed home loans FAQs","::faq{headline=\"Government-backed home loans FAQs\" :faqs='[{\"question\":\"What are the advantages of government-backed loans for first-time home buyers?\",\"answer\":\"Government-backed loans have the advantage of being guaranteed by the government, which ensures the lender will be compensated if the borrower defaults on the loan. For buyers, this backing translates to lower down payment requirements, friendlier credit rules and the possibility of better interest rates.\"},{\"question\":\"How do I choose the right loan?\",\"answer\":\"There’s no one-size-fits-all loan. Your credit score, how much money you make and the amount you’re hoping to borrow will all determine the best choice for you.\"},{\"question\":\"Can I combine different programs?\",\"answer\":\"It depends. Make sure you look up the rules for your state’s first-time home buyer programs and always check to see what your lender says.\"}]'}\n::","2024-09-10T11:48:00.000Z","If you’re a first-time home buyer worried about your credit score or pulling together the cash for a down payment, there's good news ahead. Government-backed home loans, like FHA loans, are designed to help even the playing field and turn your dream of owning a home into a reality. Let's dive in and explore how these loans can work for you.","A guide to government-backed home loans","2026-04-30T12:41:00.000Z",[1214,1215,773],"specialty-loans","fha-loans",{"introText":1217,"text":685,"to":686,"body":1218},"Ready to make your first move? ","We’re here to help you decide which loan is best for you.  ",{"title":1220,"description":1221},"Guide to Government Backed Home Loans | Citi Mortgage","Explore government-backed home loans for first-time buyers. Learn about FHA, USDA, and VA loans, and find the best option for your home purchase.","content:articles:home-buying:government-backed-home-loans.json","Government Backed Home Loans","articles/home-buying/government-backed-home-loans.json",[1226,789,1230],{"label":1227,"slug":1215,"seo":1228},"FHA Loans",{"description":1229},"Explore resources about fha loans—including types, requirements, and how to choose the right mortgage option.",{"label":1231,"slug":1214,"seo":1232},"Specialty Loans",{"description":1233},"Explore resources about specialty loans—including types, requirements, and how to choose the right mortgage option.",1780519166502]