What is private mortgage insurance? Private mortgage insurance

What is private mortgage insurance? Private mortgage insurance

Also called PMI, is a type of mortgage insurance you might e required to pay for if you have a conventional loan. Like other kinds of mortgage insurance, PMI protects the lender—not you—if you stop making payments on your loan.

PMI is arranged y the lender and provided y private insurance companies. PMI is usually required when you have a conventional loan and make a down payment of less than 20 percent of the home’s purchase price. If you’re refinancing with a conventional loan and your equity is less than 20 percent of the value of your home, PMI is also usually required.

How do I pay for PMI?

There are several different ways to pay for PMI. Some lenders may offer more than one option, while other lenders do not. efore agreeing to a mortgage, ask lenders what choices they offer.

The most common way to pay for PMI is a monthly premium.

  • This premium is added to your mortgage payment.
  • The premium is shown on your Loan Estimate and Closing Disclosure on page 1, in the Projected Payments section. You will get a Loan Estimate when you apply for a mortgage, efore you agree to this mortgage.
  • The premium is also shown on your Closing Disclosure on page 1, in the Projected Payments section. Continue reading What is private mortgage insurance? Private mortgage insurance