What is another name for private mortgage insurance?
Private mortgage insurance, also called PMI, is a type of mortgage insurance you might be 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.
How does a PMI work?
What is private mortgage insurance? PMI is insurance for the mortgage lender's benefit, not yours. You pay a monthly premium to the insurer, and the coverage will pay a portion of the balance due to the mortgage lender in the event you default on the home loan.
Is MIP the same as PMI?
The main difference between PMI and MIP, as we've already mentioned, is that PMI applies to conventional loans while MIP applies to FHA loans.
What is private mortgage insurance quizlet?
private mortgage insurance (PMI) offered by private companies to insure a lender against default on a loan by a borrower where there is a loss of collateral value at the time of the default.
How long do you pay PMI?
After you've bought the home, you can typically request to stop paying PMI once you've reached 20% equity in your home. PMI is often canceled automatically once you've reached 22% equity. PMI only applies to conventional loans. Other types of loans often include their own types of mortgage insurance.
How the PMI is calculated?
Take the PMI percentage your lender provided and multiply it by the total loan amount. If you don't know your PMI percentage, calculate for the high and low ends of the standard range. Use 0.22% to figure out the low end and use 2.25% to calculate the high end of the range. The result is your annual premium.
What does a PMI do?
Private mortgage insurance, also called PMI, is a type of mortgage insurance you might be 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.
What are the benefits of a PMI?
- Savings on Globally Recognized Certifications. Discounts on your certification exam fee as well as discounts on professional development opportunities. …
- Events and Webinars. …
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- Project Management Body of Knowledge (PMBOK®Guide) …
- PMI Global Chapters.