What is PMI?
Private Mortgage Insurance is simply insurance that protects the lender if you don’t pay your loan. It’s required by the lender if your total loan exceeds 80% of the purchase price of a new home or property, or if you’re refinancing and the total you plan to borrow will be more than 80% of the property value. One way to avoid PMI costs is to make a down payment of 20% or opt for a piggyback loan.
Private Mortgage Insurance – Insurance the buyer carries to guarantee that the lender is paid off if the buyer defaults on a mortgage. It’s required for all mortgages with less than a 20% down payment. The exact amount depends on the amount of the loan and the size of the down payment. It is usually a few hundred dollars.
