What does PMI mean and how much will it cost?

PMI is private mortgage insurance. It protects the lender if you default, and you may be required to buy it on a conventional loan when you put down less than 20%. It can be paid monthly, as a one-time amount at closing, or both. The cost depends on your loan, down payment, and credit. On many homes it runs up to roughly $200 a month, so ask your lender to quote it on your Loan Estimate. On a conventional loan, PMI can be removed: you can request cancellation at 80% of the original value, and it must end automatically at 78% if you're current on payments. FHA loans carry their own mortgage insurance, which, depending on your down payment, can last for the life of the loan, so compare carefully. VA loans have no monthly mortgage insurance, which is a real advantage if you're eligible.