What is PMI?

Answer 1

Private mortgage insurance (PMI) protects the lender in the situation of higher risk loans. Typically when the loan divided by the value of the home exceeds 80%, mortgage insurance is required. Usually the mortgage insurance premium is a percentage of your loan amount paid monthly along with your monthly payment. When you loan to value ratio drops below 80% you can drop the mortgage insurance as long as you meet the loan servicer's requirements (e.g., 12 months of on-time payments).

In 2007, PMI became tax deductible for AGIs of $100,000 or less on purchase or no cash out refinance transactions.

You can avoid paying PMI by getting a home equity loan for the amount of the loan over 80%. Getting a second loan, however, often results in a monthly payment that is higher than mortgage insurance would be. The interest rate on the second loan is typically more than the one on your first loan.

Answer 2

PMI also referred to as private mortgage insurance is coverage that a lender takes out, in the event that a borrower defaults on the loan. The rationale, is that if you have a borrower who has less of his own personaly funds injected into the purchase (typically, less than 20%), then the likelihood of him defaulting is greater since he has less to lose. So the bank takes out insurance on borrower's with less than 20% down to cover that risk. When you build up suffcient equity, then PMI eventually gets dropped since your default risk has been reduced.

Answer 3

Private Mortgage Insurance. very rare these days. Your Loan Officer will give you a slightly higher rate for LPMI (lender paid mortgage insurance) or he/she will break your loan into 2 loans to avoid the pmi.

Answer 4

Primate mortgage insurance..

Typically if you cant get the 20% down that most banks want they may apply PMI the loan because you are deemed a higher risk of foreclourse problems..

Dont ever do it, go with a piggyback loan as you will end up saving more money over time.

Answer 5

Primary Mortgage Insurance. Most lenders will require it if you pay less than 20% down on a home. You will have to carry it until the lender is satisfied that you have a minimum of 20% equity in the home.

There are ways around it, but most of the time you should bite the bullet. Sometimes it can be deductible.

Answer 6

Private Mortgage Insurance. It's required when the loan to value of the house is above 90%, or if the borrower is a subprime lender. It is usually escrowed into the loan.

Answer 7

Private Mortgage Insurance. You need it if I believe you don't have 20% down on a house when you buy it.

Answer 8

A policy of insurance issued by a non-governmental entity which protects a lender against the default of the borrower.