PMI, or private mortgage insurance, is generally required by a mortgage lender when the loan amount for a mortgage is greater than 80% of the value of the property. For example, if you are buying a $200,000 home and are putting down less than $40,000, you will most likely be required to pay PMI. The homeowner pays the PMI premium, and the policy protects the lender against the risk of default. Should the home go into foreclosure and the lender loses money, they can file a claim with the insurance company.
So – to the question, how long do you have to keep paying PMI? [Read more...]