What is Private Mortgage Insurance (PMI)?
Private Mortgage Insurance is provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults.
Private Mortgage Insurance is generally required for a loan with an initial loan to value (LTV) percentage in excess of 80%.
In most cases, this will mean that you will have to pay Private Mortgage Insurance if your down payment is less than 20% of the value of the home you are purchasing or refinancing.
Additional Mortgage FAQs
- How does an escrow account work?
- What are Discount Points (or Points)?
- What are the common fees through the mortgage process?
- What are the steps in the Mortgage Process?
- What is a Loan To Value Ratio (LTV)?
- What is a Rate Lock or Lock In?
- What is a Truth-in-Lending Disclosure and why do I receive it?
- What is Private Mortgage Insurance (PMI)?
- What is the difference between a Mortgage Broker & Mortgage Banker?
- What is the difference between Interest Rate & APR?