what is PMI? i heard this term used for when not having enuff for a down payment for a home, but what is it?

Answer 1

private mortgage insurance. If you don't make at least a 20% down payment, most lenders will charge you a monthly fee for PMI. They will collect PMI until you have reached the equivalent of 20% down.

Answer 2

PMI is private mortgage insurance. You pay it monthly, in most cases, in addition to your principal & interest payment on your mortgage, taxes and property insurance.

The insurance protects your lender (bank) from any loss incurred if you were to default on your loan. It's generally required if you put less than 20% down payment on your home, except if you do an 80% first mortgage and finance the remainder with a second mortgage.

Rates for PMI vary based on loan product, credit, and loan-to-value ratios. It's more expensive if you put 0 down than if you put 10% down, for example.

Ultimately, you pay extra for the ability to finance more against your house than the average bank would be willing to do without some protection. But it can be worthwhile just as a way to get into your first home.

Answer 3

PMI is Private Mortgate Insurance. Its is needed when you have 20% or less equity in a house. It is a safe guard brought about by the great depression.

Answer 4

Private mortgage insurance. Must have it if you put less than 20% down. Not cheap either. Can get rid of it once you have 20% equity in the home.

Answer 5

Private mortgage insurance compensates the lender if you as the homeowner defaults on the loan.

Answer 6

If you don't put the specified % deposit down on your home, creditors look at you as more of a risk, so they take an insurance policy out that will cover their investment in you if you default on your loan.

Answer 7

I think it is prepaid mortgage insurance? It's standard for first time buyers unless there is a huge amount of assets available to leverage the loan.

Answer 8

http://blog.chattanoogarealestatetoday.com/archives/110