Mortgage

QWhat Is Private Mortgage Insurance?
APrivate mortgage insurance (PMI) policies are designed to reimburse a mortgage lender up to a certain amount if you default on your loan and your house isn't worth enough to entirely repay the lender through a foreclosure sale. Most lenders require PMI on loans where the borrower makes a down payment of less than 20%. Premiums are usually paid monthly and typically cost around one-half of one percent of the mortgage loan. With the exception of some government and older loans, most lenders allow you to drop PMI once your equity in the house reaches 20-25% and you've made timely mortgage payments.