– **Mortgage insurance (MI)** is required in Florida when a borrower makes a down payment of less than 20% on a home purchase.

– **Two main types of MI:** Private Mortgage Insurance (PMI) for conventional loans and Mortgage Insurance Premium (MIP) for FHA loans.

– **PMI** is typically required if the loan-to-value (LTV) ratio exceeds 80%.

– **PMI Costs:** Can range from 0.3% to 1.5% of the original loan amount annually, paid monthly. Credit score and down payment size significantly impact the premium rate.

– **PMI Cancellation:** PMI can be canceled once the LTV reaches 78% based on the original property value, provided the borrower is current on payments. Borrowers can request cancellation at 80% LTV.

– **FHA MIP:** Requires an upfront premium (currently 1.75% of the loan amount) and an annual premium (ranging from 0.45% to 1.05% of the loan amount), paid monthly.

– **FHA MIP Duration:** For loans with less than 10% down, MIP lasts for the life of the loan. For loans with 10% or more down, MIP lasts for 11 years.

– **Avoiding MI:**
– Saving for a 20% down payment.
– Exploring piggyback loans (taking out a second mortgage to reach the 20% equity threshold).
– Consider VA loans (for eligible veterans and active-duty service members, which typically don’t require MI).
– Seeking lender-paid mortgage insurance (LPMI), which results in a higher interest rate but eliminates the separate MI payment.