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Conventional Mortgages: What Texas Buyers Should Know About PMI
By Ross Monsen, NMLS #1579300 • Updated October 14, 2026
Quick answer: Private mortgage insurance generally applies to conventional mortgages with less than 20% down. It protects the lender and adds to the borrower’s cost; cancellation depends on the loan and applicable rules.
Separate the down payment from the full cost
Putting 20% down can avoid PMI on a conventional loan. With a smaller down payment, ask how the insurance is paid and compare the total payment, fees, and cash needed. A lower initial cash requirement may matter more to one buyer than avoiding monthly PMI.
A useful comparison
For a $350,000 purchase, 10% down is $35,000 and 20% down is $70,000. The difference is $35,000. Before choosing, compare actual lender estimates and how much cash each option leaves for repairs and emergencies. PMI pricing is borrower- and loan-specific; do not use a generic internet percentage as your quote.
When can borrower-paid PMI end?
For many covered conventional loans on single-family principal residences, you may request cancellation when the balance reaches 80% of original value, subject to conditions including a written request, payment history, and property value. Automatic termination generally occurs at the scheduled 78% point if payments are current. Lender-paid insurance and FHA insurance follow different rules.
What does original value mean?
For a purchase, it generally means the lower of the original sales price or appraised value. Appreciation-based cancellation can have separate investor and servicer requirements. Ask your servicer for the exact rules before paying for an appraisal.
Questions worth asking
Is the PMI monthly, upfront, or lender-paid? What is its estimated cost? What cancellation conditions apply to this loan? What happens to my payment after cancellation? Keep your closing insurance disclosure so you can revisit the timeline later.
Source: CFPB — What is PMI? • Source: CFPB — PMI cancellation.
The Mortgage Standard Group, LLC • Company NMLS #2795757 • 4616 Gibson St, Houston, TX 77007.
Ross Monsen, NMLS #1579300 • 713-705-2889 • ross@thestandard.mortgage.
Educational information only; not a commitment to lend. All loans subject to eligibility, underwriting, property, and lender requirements.
Licensed in Texas by the Department of Savings and Mortgage Lending • Texas SML Mortgage Company License • Equal Housing Opportunity.
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