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MAIN Arrow to HomeYour Money Arrow to InsuranceInsurance Arrow to Liability Insurance PMI Private Mortgage Insurance

Along with all the other costs of buying a new house, most homeowners - especially those just starting out - can expect to pay additional private mortgage insurance, better known in the banking community as Private MI or PMI.

To protect themselves, most banks will require that borrowers pay for PMI if the home loan they take out is more than 80 percent of their home's value. In short, buyers with less than a 20 percent down payment are normally required to pay PMI.

The main benefit to consumers is that they don't have to wait to save for a large down payment before they purchase their new home. Then, once the mortgage is paid down to where their home equals less than 80 percent of the original purchase price - they can, under present law, cancel their PMI payments.

Since borrowers mistakenly continue to pay for private mortgage insurance beyond the required time, new regulations call for lenders to cancel PMI automatically once the loan is sufficiently paid down.

As with all most banking transactions, there are some caveats. Generally, borrowers must in good standing when it comes to repaying their mortgage loan, and their property must not have decreased in value below the original purchase price in order to be eligible for private MI cancellation.

On the Web, find out more about the advantages of PMI and what it may cost you, related questions to ask your lender, along with other expert consumer guides including tips, advice, facts and information on personal mortgage insurance...

also see -> Homeowners Insurance | Condo / Coop Insurance

Renters Insurance | Title Insurance

More facts & information about mortgage insurance around the Web:

What is private mortgage insurance? How does PMI work? - Excellent consumer guide covering the benefits of PMI, details on requirements and cancellation regulations under the Homeowners Protection Act.

Questions on Mortgage Insurance - General overview of the mortgage insurance industry with additional facts and information on PMI, from the Mortgage Professor.

Mortgage Insurance Companies of America - Industry association with PMI basics, related video presentations, interactive rate calculators, FAQ, glossary.

Does mortgage insurance make sense? - Expert tips from CNNMoney.

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