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What Is PMI?
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What is Mortgage Insurance (MI)?
Mortgage Insurance - also known as MI, protects a lender's investment in the event a
homeowners should default on a home loan
Mortgage insurance is a financial
guaranty business in which the insurer assumes a portion of a lender's risk in making a mortgage loan. Lenders and investors typically require mortgage insurance for loans with down payments of less than 20%
Why is private MI needed?
Experience shows that homeowners with less than 20% invested in the cost of a home are more likely to default, making low-down-payment mortgages riskier for lenders and investors. To offset that risk, lenders and investors typically require mortgage insurance for loans with down payments of less than 20%.
What's the difference between Mortgage Insurance and FHA insurance?
Mortgage Insurance is the private sector alternative to Federal Housing Administration (FHA) mortgage insurance, which is a government program backed by taxpayers. Private MI typically may be cancelled sooner than FHA and is often less expensive.
Are private mortgage insurance and mortgage life insurance the same thing?
No. Private MI is not mortgage life insurance, which pays off a mortgage if the homeowner dies or becomes disabled.
Are private MI and homeowners insurance the same thing?
No. Homeowners insurance protects homeowners from loss due to theft, fire or other disaster. Private MI protects the lender and investor from loss, not the borrower.
Are MI premiums tax-deductible?
Borrower-paid MI premiums may be tax deductible. We are not legally able to provide Tax advise. You should contact your tax adviser. You can also check the
The Better Tax Deductible Alternative to a Loan with Mortgage Insurance
Lender Paid Mortgage Insurance (LPMI)
LPMI offers a better income Tax deduction for those who are not eligible to deduct their mortgage insurance. Generally speaking, the overall payment comparison between a loan with Mortgage Insurance V. one without favors the one without.
If you currently have a loan with PMI,
to start the process of removing it Today!