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January 2014
By: Stewart McClure

private-mortgage-insurance-and-buying-a-houseWhat is private mortgage insurance (PMI)? PMI is generally required to qualify for a mortgage or refinancing on a first or second home when the borrower has less than a 20% down payment or less than 20% equity in their property. It is insurance to protect the lender in case the borrower defaults on mortgage payments. The borrower pays the premiums and the lender is the beneficiary.

The PMI premium (cost) may be paid either in a one-time payment at closing, or in installments added to the borrower’s monthly mortgage payment. A number of factors should be considered to determin ...


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