What is PMI payment, does everyone need to pay it?
When applying for a home loan, lenders typically require that a borrower provides a 20% down payment of the property's purchase price. If the borrower is unable to, then lenders will typically look at the loan as a riskier investment and will require the borrower to take out PMI.
The PMI payment is usually paid monthly as part of the overall mortgage payment to the lender. Once the borrower has paid enough towards the principal amount of the loan (the equivalent of that 20% down payment), he or she can contact their lender and ask that the PMI payment be removed.
Another way to avoid the PMI payment is by taking out a smaller loan (typically at a higher interest rate) to cover the amount of the 20% down, as well as taking out the main mortgage, a practice commonly known as "piggybacking". Now the borrower is committed on two loans, but since the funds from the second loan are used to pay the 20% deposit, the borrower doesn't incur PMI. Borrowers can typically deduct the interest on both loans on their federal tax return if they are itemizing deductions. (For related reading, take a look at Outsmart Private Mortgage Insurance.)
This question was answered by Steven Merkel.