What is PMI Insurance?
Private Mortgage Insurance or PMI as it is more commonly known, is a mandatory insurance policy that is added to some borrowers monthly mortgage payments. This policy is in the event that the borrowers were to default on the loan. This protects the investors and or mortgage lenders on their investment so that the remainder on the mortgage note would be covered and the loan would be paid in full. This is not to say however, that the borrower will be forgiven for defaulting. • Who Is Required To Have PMI Insurance? Most new homeowners have to pay this added monthly cost. This is because any borrower who put less than 20% down (in some few cases more (check your loan documents) on their home when they purchased it or any borrower who has less than 20% equity in their home probably is still paying the private mortgage insurance policy. • How Would This Affect Me? Few homeowners realize over the years, that as they pay down their mortgage, generally appreciation in the property increases. T
