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Private Mortgage Insurance (PMI)

Policy protecting the holder against loss resulting from default on a mortgage loan.

Private Mortgage Insurance

An insurance policy that a mortgage holder buys on behalf of a lender, protecting the lender in the event of default on the mortgage. Most lenders require their mortgage borrowers to purchase PMIs if the mortgage's loan-to-value ratio is more than 80%. Generally speaking, annual premium payments on PMIs are equal to 0.5% of the value of the mortgage at the time it is borrowed. When the loan-to-value ratio falls below 78%, most lenders are required to inform homeowners that they may cancel their PMI policies. Some borrowers avoid PMI by taking out a piggyback mortgage, that is, a second mortgage allowing one to borrow up to 100% of the home's value in which the loan-to-value ratio is approximately 80% in the first mortgage and 20% in the piggyback.

Private mortgage insurance (PMI).

When you buy a home with a down payment of less than 20% of the purchase price, your lender may require you to buy private mortgage insurance (PMI), which protects the lender against the risk that you may fail to repay your loan.

The premiums you can expect to pay will vary, but typically come to about 0.5% of the total amount you borrow.

For instance, on a $150,000 mortgage, a typical annual PMI premium would be $750, which is 0.5% of $150,000. Divided into monthly payments, this premium would come out to $62.50 a month.

You can usually cancel your PMI when you meet certain criteria. Generally, this is when the balance of the mortgage is paid down to 80% of either your home's original purchase price or its appraisal value at the time you took out the loan. You can check if it's possible to cancel your PMI by reviewing your annual mortgage statements or by calling your mortgage lender.

If you forget to cancel your PMI, your lender is required by federal law to end the insurance once your outstanding balance reaches 78% of the original purchase price or appraisal value at the time you took the loan, or you have reached the mid-point of the loan term, provided you meet certain requirements.

The lender must give you information about the termination requirement at closing. There are some exceptions to the termination rule, including high risk mortgages, VA and FHA mortgages, and those negotiated before July 29, 1999.


See private mortgage insurance.


See Private Mortgage Insurance.

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The origination of mortgages covered by PMI often requires less paperwork, however.
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David played key roles in establishing PMI in Australia, Europe, and Hong Kong.
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Chan joined PMI in April 2004 as Director of Asia Operations from GE Global Financial Restructuring Group where he was Vice President - Asia Risk.
We are very proud to have achieved this milestone of facilitating home ownership for more than one million families in Australia and New Zealand," said Brad Shuster, President of International and Strategic Investments for The PMI Group, Inc.
At the time the exchange offer is commenced, PMI will file a Tender Offer Statement with the Securities and Exchange Commission.
I would also like to thank The PMI Group for recognizing the need for affordable housing and selecting Mission of Peace as its partner in the Flint Gateway Initiative.
PMI will file a Tender Offer Statement on Schedule TO with the Securities and Exchange Commission today.
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