TeachMeFinance.com - explain private mortgage insurance (PMI)
Private mortgage insurance (PMI) --
protects the lender against a loss if a borrower defaults on the loan. It is usually
required for loans in which the down payment is less than 20 percent of the sales price
or, in a refinancing, when the amount financed is greater than 80 percent of the appraised
private mortgage insurance (PMI) -- insurance policies written by private companies insuring lenders against loss resulting from defaults on mortgages.
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