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What is Private Mortgage Insurance (PMI) and why is it important to lenders?

April 26, 2017lenders PMI private mortgage insurance

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What is Private Mortgage Insurance (PMI) and why is it important to lenders?

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PMI is an insurance policy that insures your lender in case of future loan default. On almost all conventional loans PMI is required when the borrower doesn’t have the necessary 20% down payment, or in lieu of PMI the loan is broken up into two higher interest rates mortgages. Typically, PMI is very expensive and is paid on a monthly basis as part of your mortgage loan payment. VA loans do NOT require monthly PMI payments and may save you several hundred dollars per month. Please Contact a VA Specialist for details.