According to the Consumer Financial Protection Bureau, PMI protects the lender, not you, if you stop making payments on your loan. It is arranged by the lender through a private insurance company, and the borrower pays for it.

The CFPB says PMI is required if you take out a conventional loan with a down payment of less than 20 percent of the purchase price. For illustration only, 20 percent of a $400,000 purchase price is $80,000, so a buyer putting down less than that on a conventional loan would be in the range where PMI comes up. A smaller down payment also means a larger loan balance, which Fannie Mae lists as one of the cost factors.

PMI is specific to conventional loans. The CFPB's page on types of mortgage insurance explains that FHA loans have their own mortgage insurance, USDA loans have their own, and VA loans use a funding fee instead, so the terms in this guide do not describe those programs.

The CFPB says the most common way to pay for PMI is a monthly premium that is added to your mortgage payment, and that sometimes it is paid as a one-time upfront premium at closing. Either way, the cost shows up in your loan documents, so you can see it before you commit.

Fannie Mae says the cost of PMI depends on factors such as the size of the down payment, the credit score, the loan amount, and the loan type. A larger down payment or a higher credit score is generally associated with a lower cost, according to those factors, but the actual figure comes from the insurer and lender.

I am not listing PMI rates here because quotes change over time and differ by borrower. The reliable number is the one on your own Loan Estimate, and comparing it across lenders is a practical way to see what PMI would add to your monthly payment.

If you are building a budget, my guide to pre-approval vs pre-qualification explains how to get your own numbers first, and my guide to closing costs in Nevada covers other costs to plan for. Having those figures in hand makes the PMI quote on your Loan Estimate easier to read.

For many conventional loans, federal rules set when PMI can end. As the CFPB explains, you have the right to ask your servicer to cancel PMI on the date your principal balance is scheduled to fall to 80 percent of the original value of your home. That is the original value, which may not be the same as what the home is worth today.

To request cancellation, the CFPB says you generally need to make the request in writing, have a good payment history, be current on your payments, certify that there are no junior liens on the home, and show that the value has not declined. Ask your servicer exactly what it requires, because the process is handled through the servicer, and ask whether it publishes its own cancellation steps or forms.

The servicer must automatically terminate PMI on the date your balance is scheduled to reach 78 percent of the original value, provided you are current on your payments. The CFPB also says the lender or servicer must end PMI the month after you reach the midpoint of your loan's amortization schedule, as long as you are current.

The FDIC's compliance manual on the Homeowners Protection Act adds that lenders must give written disclosures at closing about these rights, and that servicers must provide annual statements describing cancellation and termination options. That manual notes the Act does not cover lender-paid insurance, FHA or VA loans, or certain high-risk loans, which follow different rules.

The CFPB says these rules apply to mortgages for single-family principal residences closed on or after July 29, 1999. If your loan is outside that group, or you are not sure which applies, ask your servicer for the date PMI is scheduled to end and keep a record of the answer.

These are practical suggestions, not requirements. Check your annual statement for the dates, ask your servicer what documents it needs for a cancellation request, and do not stop paying PMI until the servicer confirms in writing that it has ended.

I am a real estate agent, not a lender or an attorney, and this guide is general information, not financial advice or advice from an attorney. A lender or servicer can answer questions about your specific loan.

If you are moving to the valley, my Las Vegas Valley relocation checklist covers the wider picture. If you are selling, my Las Vegas and Henderson seller guide covers that side.