What does PMI stand for in relation to Mortgage Insurance

[Lynn CC]

I have no idea what it stands for, I thought maybe one of you would know!

 

[KathyTX]

Private Mortgage Insurance.

You are usually required to have this when you don't have a lot of down payment or equity.

 

[ohiominnie]

Usually they require this if you don't have (I believe) 20% of the value of your home.

When we just refinanced it was dropped!! WOO-HOO

 

[KathyTX]

I think that 20% is right, ohiominnie!

So if you're financing more than 80% of a home's value, the lender will usually require that you carry PMI on the loan to protect them in case you default.

 

[TigH]

When my sister bought her house, she was able to avoid PMI by taking a slightly higher interest rate. I can't remember all the details, but it worked out better for her in the end because she could deduct the extra expense on her taxes whereas she wouldn't have been able to deduct the PMI. Now she is refinancing and won't have to worry about either of those things though...