Carrie bought a house five years ago for $150,000. At that time she borrowed $140,000 from her bank. The house is now worth $162,000. Her PMI will automatically be dropped when her mortgage balance drops to

Question

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PMI (Private Mortgage Insurance) is typically required when a homebuyer makes a down payment of less than 20% of the home's purchase price. It is automatically dropped when the mortgage balance falls to 78% of the original purchase price of the home. In this case, 78% of $150,000 (the original purchase price) is $117,000.

Carrie Bought a House Five Years Ago for $150,000