What Adams Properties PMI Covers and How It Works

Adams Properties PMI is a private mortgage insurance option for homebuyers in South Carolina

Private mortgage insurance (PMI) through Adams Properties protects your lender if you put down less than 20 percent on a home purchase. Adams Properties offers PMI as part of its property management and lending services across South Carolina. PMI lets you buy a home sooner without waiting to save a full 20 percent down payment, though it adds a monthly cost to your mortgage until you build enough equity.

PMI is not homeowners insurance—it does not cover damage to your house or liability. It only protects the lender's investment if you stop paying your mortgage. Once you reach 20 percent equity in your home, you can request to have PMI removed, which lowers your monthly payment.

Key Takeaways

• Adams Properties PMI allows homebuyers to purchase with a down payment smaller than 20 percent, making homeownership accessible sooner.
• PMI protects your lender, not your home, and costs between 0.5 and 1.5 percent of your loan amount annually, though rates vary based on your credit score and down payment size.
• You can request PMI removal once you reach 20 percent equity in your home, which typically happens through a combination of payments and home appreciation.
• Adams Properties handles PMI as part of its mortgage and property management services, so your PMI payments are bundled into your monthly mortgage bill.

How PMI costs are calculated and what affects your rate

Your PMI rate depends on three main factors: how much you put down, your credit score, and the size of your loan. Borrowers with lower down payments (5 to 10 percent) pay higher PMI rates than those putting down 15 to 19 percent. A stronger credit score also lowers your rate, sometimes by half a percentage point or more.

Adams Properties calculates your annual PMI cost as a percentage of your loan amount. If you borrow $200,000 and your rate is 1 percent, you pay $2,000 per year, or about $167 per month. This amount is added to your mortgage payment, so you see it as one line item on your monthly bill. The exact percentage you pay depends on your individual situation, so ask Adams Properties for a rate quote before you commit to a mortgage.

When you can remove PMI from your mortgage

Federal law requires lenders to remove PMI automatically once you reach 22 percent equity in your home, calculated from your original loan amount. You can request removal earlier—typically at 20 percent equity—but the lender has the right to deny the request if your home value has dropped or you have missed payments.

Equity builds through two routes: your monthly mortgage payments and home appreciation. If you bought for $250,000 and your home is now worth $270,000, you have gained equity through appreciation. If you have also paid down your loan balance, you gain equity twice as fast. Adams Properties can tell you your current equity position and what you need to reach 20 percent, so you know when removal becomes possible.

PMI versus other down payment options

Some borrowers choose to avoid PMI by saving for a larger down payment, taking out a second mortgage (called a piggyback loan), or using a first-time homebuyer program that waives PMI. Each path has trade-offs. Waiting to save 20 percent delays homeownership and means you miss years of building equity and potential home appreciation. A piggyback loan means two separate mortgages with two interest rates and two sets of fees, which can cost more than PMI over time.

First-time homebuyer programs in South Carolina, offered through organizations like the South Carolina Housing Finance and Development Authority, may offer down payment help or PMI waivers, but they come with income limits and other restrictions. PMI through Adams Properties is often the fastest and most straightforward path for buyers who do not meet those program requirements or who want to move quickly.

What to expect during the mortgage process with Adams Properties

When you apply for a mortgage with Adams Properties, they will quote your PMI rate along with your interest rate and closing costs. The PMI premium is typically paid upfront at closing (called an upfront mortgage insurance premium) or rolled into your monthly payment, or sometimes split between the two. Ask Adams Properties which method they use, because it affects how much cash you need at closing.

Your loan documents will spell out the PMI terms, including the rate, the removal threshold (usually 20 or 22 percent equity), and whether you can request removal or if it happens automatically. Keep these documents—you will need them later to prove your equity position when you ask for PMI removal. Adams Properties will track your equity as you make payments, and they will notify you when you approach the removal threshold.

Common reasons PMI removal gets delayed

The most common reason removal takes longer than expected is that home values drop after purchase. If your home is worth less than you paid, you have negative equity, and the lender will not remove PMI even if you have paid down the loan balance. A second reason is missed or late payments—lenders view payment history as a sign of risk and may refuse removal requests if you have fallen behind.

A third reason is that some borrowers underestimate how long it takes to reach 20 percent equity. If you put down 5 percent and borrowed $200,000, you need to pay down $20,000 in principal before you hit 20 percent equity. With a 30-year mortgage, that can take 5 to 7 years, depending on your interest rate. Home appreciation can speed this up, but you cannot count on it. Ask Adams Properties to show you a timeline based on your specific loan terms.

How PMI differs from homeowners insurance and property taxes

PMI, homeowners insurance, and property taxes are three separate costs that all appear on your mortgage bill, but they protect different things. Homeowners insurance covers damage to your house from fire, theft, weather, and liability if someone is injured on your property. Property taxes fund local schools and services. PMI only protects your lender if you default on the loan.

Your lender requires all three before closing, but only PMI goes away once you build equity. Homeowners insurance and property taxes remain for as long as you own the home. Understanding the difference helps you budget accurately and know which costs are temporary and which are permanent.

Frequently Asked Questions

Can I remove PMI before reaching 20 percent equity?

No. Federal law sets 20 percent equity as the earliest point you can request removal, and lenders can refuse if your home value has dropped or you have missed payments. Some lenders remove PMI automatically at 22 percent equity regardless of your request, but you cannot force removal before 20 percent.

What happens to my PMI if I refinance my mortgage?

Refinancing can remove PMI if your new loan amount is 80 percent or less of your home's current value. If you have built equity since purchase, refinancing may let you drop PMI even if you have not reached 20 percent on your original loan. Ask Adams Properties whether refinancing makes sense for your situation.

Does PMI cost the same every month?

Yes, your monthly PMI payment stays the same throughout the life of the loan, unless you refinance. Some lenders offer declining PMI that decreases as you build equity, but this is less common. Ask Adams Properties whether your rate is fixed or declining when you receive your quote.

Can I pay off my mortgage early to remove PMI faster?

Yes. Extra payments toward principal reduce your loan balance faster and build equity sooner, which means you reach 20 percent equity and can request PMI removal earlier. Make sure your loan has no prepayment penalty before you start making extra payments—Adams Properties can confirm this in your loan documents.

What if my home value drops after I buy—does PMI protect me?

No. PMI protects only the lender, not you. If your home value drops, you may owe more than the house is worth (negative equity), and PMI does not cover that loss. This is why PMI removal becomes harder if home values fall in your area.