Mortgage and Insurance Forum

[Alex Chris]

Private mortgage insurance works a bit differently than other forms of insurance like health or life insurance. To understand how it's different, you first have to understand what it is. Investopedia.com defines private mortgage insurance, which is sometimes abbreviated as PMI, as "A policy provided by private mortgage insurers to protect lenders against loss if a borrower defaults." Yes, you read that correctly; private mortgage insurance is insurance coverage for your mortgage loan provider on which you pay the premium. That's the first difference.

The second major difference between private mortgage insurance and many other forms of insurance is that PMI is not optional. A mortgage lender can require that you, as a homebuyer, pay private mortgage insurance if you do not or cannot afford to make at least a 20% down payment towards the purchase of your home. Though many aspects of your mortgage loan may be negotiable, PMI typically is not; it's usually a condition on unconventional loans.

[lora001]

Hi, thanks for the Post. can you tell me how much does it cost?

[Delela]

The name sounds posh, but don't let the spiffy name trick you. Private mortgage insurance works a bit differently than other forms of insurance like health or life insurance. To understand how it's different, you first have to understand what it is. Investopedia.com defines private mortgage insurance, which is sometimes abbreviated as PMI, as "A policy provided by private mortgage insurers to protect lenders against loss if a borrower defaults." Yes, you read that correctly; private mortgage insurance is insurance coverage for your mortgage loan provider on which you pay the premium. That's the first difference.

The second major difference between private mortgage insurance and many other forms of insurance is that PMI is not optional. A mortgage lender can require that you, as a homebuyer, pay private mortgage insurance if you do not or cannot afford to make at least a 20% down payment towards the purchase of your home. Though many aspects of your mortgage loan may be negotiable, PMI typically is not; it's usually a condition on unconventional loans

[kindred]

Private Mortgage Insurance (PMI) is an insurance that protects the lender against loss if the borrower defaults. The good thing about PMI is that it makes it possible for you to purchase a house with as little as a 3-5% down payment, instead of waiting for years to come up with large amounts of money. The catch is, once you have the house, it no longer benefits you. The insurance is basically an additional cost to the borrower for the increased risk held by the lender. It is important to track down your payments and request cancellation of the PMI premiums when the loan-to-value ratio hits 80%.