Jamie Riedford BTE 234 December 1, 2010 Private Mortgage Insurance After reading this article on “The Money Alert” website, I have a much better understanding of the advantages and disadvantages of private mortgage insurance, or PMI. Private mortgage insurance is a type of insurance that protects your lender against non-payment if you were to default on your loan. I did not previously understand that the only benefit to a homeowner is a lower down payment on a mortgage; this insurance is strictly to protect the homeowner’s lender. The costs of private mortgage insurance may vary, but the average amount usually falls between one and a half and one percent of the loan amount. For people who would not normally be able to afford a large 20 percent down payment when buying a home, private mortgage insurance is a “foot in the door.” PMI allows people to own homes with a zero to five percent down payment. This insurance might help some get started homeownership, but there may come a time where
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- Fall '10
- Mortgage loan, private mortgage insurance