what is PMI

Private Mortgage Insurance is required on Conventional Loans when you have less than 20% equity in the property for refinance or less than 20% down payment on a purchase. Mortgage Insurance protects the lender in case of consumers defaulting on payments.

Private mortgage insurance, for loans with less than 20%down.

PMI stands for Private Mortgage Insurance, but is commonly used to describe any mortgage insurance on a loan. The general concept is that a loan is considered very risky if the borrower puts less than 20% down payment. The lender will then require mortgage insurance on the loan that will protect them for the difference between what you put down and 20% down if you were to default on the loan. Once you get past 20% equity, generally speaking, the PMI can be removed from the loan and effectively lowering your monthly payment. This is NOT true for all loans and all situations, so be sure to talk to your loan officer about PMI, how it works on different loan types, and options for alternatives to monthly PMI - like lender paid mortgage insurance. In MN and WI, visit www.Minneapolis-Mortgage.net

PMI stands for Private Mortgage Insurance. If you purchase a home with less than 20 percent down you will have to pay for PMI until you build enough equity.

Joe's answer is correct.. I would also add one thing.. PMI is insurance which YOU pay, but the beneficiary is the LENDER.. if you default on the loan, and the lender forecloses and the lender suffers a loss, the insurance that YOU paid for will pay the LENDER a portion of their loss, less deductible.. Let me emphasize Joe's last point.. Be sure to ask about how to cancel mortgage insurance, since some programs you can remove it after 24 months and other programs require payment for the life of the loan.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

It's private mortgage insurance which is required if your down payment is less than 20%. It is required to be eliminated automatically by the lender when your home's loan-to-value ratio reaches 78% of your home's FMV when the loan was originated, and can be requested to be eliminated at 80%. Some lenders will eliminate it, some won't.Don't even consider a FHA loan at 3.5% down unless your FICO score is very low or you don't have at least 2 months of housing payments in cash reserves. A retirement account may be used for cash reserves under certain circumstances. You will have to pay mortgage insurance (MI) because the home's equity will be less than 20%. It may be possible to get a 2nd, but that would have to be researched. Stay away from FHA because it will cost you 1.75% up front, the MI will be higher than private MI monthly, and it will be for the life of the loan rather than when your home's equity is at 78% or 80%. Give me a call 16/7, or email me your phone number so I can call you, and I'll be happy to walk you through the process. To learn more about me and our mortgage brokerage, click on my picture. When the next page pops up, click on "Website" and you will be redirected to ours. We work exclusively in CA and get loans done fast, typically in less than 30 days, at low interest rates and costs. Representing 46 quality lenders that offer more than 1,000 loan programs, we definitely have something for everybody.