PMI provides no coverage WHATSOEVER to the buyer to keep their house in case of financial hardship that leads to the default.. But still the buyer has to pay the premium either directly, or in the case of "lender paid PMI - though a higher interest rate.
PMI adds very high additional fees to the borrowing costs when you have a meager down payment.
There are also additional underwriting requirements that the PMI company will impose on the loan.
This is the complicated part of the problem that some loan officers do not understand: The FUNDING lender can "approve' the loan, (subject to funding conditions) only to have the PMI company refuse to insure the loan against default. Since PMI is a funding condition, the loan does not fund.
I bring up this uncommon (but not rare) scenario because PMI companies are increasingly wary of stated income loans these days. Make sure your loan officer checks the stated income application with the PMI company underwriting criteria as well as the funding lender underwriter, early in the process
The credit score is another big factor. You may be approved for the mortgage, but if your credit score is lower you may end up paying a much higher rate of PMI. Another thing to look into is lender paid PMI. This means the PMI is built into the interest rate instead of as a seperate payment. This can often save you money.
The best thing you can do is talk with a qualified loan officer. That way you know the answer fits your situation, not a generality.
That varies on your lender and loan program. I have a client who just obtained a 100% loan, and her PMI was about $5 per month...this was via a special first time buyer program for a loan amount of $195k. Your loan officer should provide you with a "Good Faith Estimate" that itemizes all of your up front costs, and your monthly payment breakdown. If he/she has not already provided you one, you should definitely ask.