Final answer:
To stop paying for PMI, the buyer usually needs to reach a certain level of equity in their home. In this case, the buyer can stop paying for PMI when the remaining mortgage balance reaches $208,000.
Step-by-step explanation:
When a buyer purchases a property with 100% financing, they are usually required to obtain private mortgage insurance (PMI). PMI is an additional fee that is added to the mortgage amount and helps protect the lender in case the buyer is unable to make payments and goes into default.
To stop paying for PMI, the buyer typically needs to reach a certain level of equity in their home. This is usually when the remaining mortgage balance is 80% or less of the original purchase price. In this case, the buyer purchased the property for $260,000, so they will be able to stop paying for PMI when the remaining mortgage balance reaches $208,000 (80% of $260,000).
Assuming the property's value has not changed, the buyer can determine at what point they will reach this equity level by keeping track of their mortgage payments. As they make monthly payments, the principal balance on their mortgage will gradually decrease. Once the remaining mortgage balance reaches $208,000, they can contact their lender to request stopping the PMI payments.