Investor Glossary-pmiInvestor Glossary-pmiInvestor Glossary-pmiInvestor Glossary-pmiInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

PMI

The HTML to link to this page
 

PMI, or Private Mortgage Insurance, is insurance that indemnifies a lender against borrower default on a residential mortgage. The borrower pays the PMI insurance premium. In the US, PMI is typically required when the loan-to-value ratio, or LTV, of the loan is greater than 80%. When home equity is lower than 20%, default risk increases, and PMI protects the lender. Many loans do not need PMI for a high LTV. For example, FHA and VA loans are guaranteed by the government and thus never need PMI. It is often up to the borrower to get the PMI policy canceled once home equity reaches 20% to avoid having to continue to pay premiums. PMI regulations and practices vary from state to state and lender to lender. A local mortgage banker or mortgage broker should know PMI specifics that apply to a particular loan.



Rate this PMI definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: real GDP, per diem, APR, open position, ex-dividend date, current ratio, VIX, Zero Cost Collar, reverse mortgage, option premium, LIBOR, 1031 exchange, risk management, phantom income, cancelled check, FICO score, command economy, wholly-owned subsidiary, dividends payable, EBITDA, stock market close, balance sheet, deferred revenue, minority interest, irrevocable trust, deferred tax, required rate of return, 144a, FTSE, in escrow, limit order, stock split, implied volatility, debt service coverage, annual return, labor relations, quality assurance, ex-dividend, average price per share, inflation, 401a, 1035 exchange, class C shares, diluted share, margin rate, Key Rate Duration, retained earnings, liquidity ratio, covered put


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2015 Investor Glossary - All rights reserved - Terms of Use