MAIN Your Money 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 PMI.

To protect themselves, most banks will require that borrowers pay for PMI if the 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 PMI 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 mortage loan, and their property must not have decreased in value below the original purchase price in order to be eligible for PMI 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 incuding tips, advice, facts and information on personal mortgage insurance...

Private Mortgage Insurance (PMI) - Excellent consumer guide available online or downloadable in PDF format covering the benefits of PMI, details on requirements and cancellation regulations under the Homeowners Protection Act.

Private Mortgage Insurance (PMI) - Yahoo! Finance - Extensive information on the topic including examples of how PMI works, tips on keeping track of payments, how to avoid PMI, with links to related story features.

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 assocation with PMI basics, related video presentations, interactive rate calculators, FAQ, glossary.

Understanding PMI (Private Mortgage Insurance) - A discussion on PMI benefits to both the lender and borrower, Homeowner Protection Act regulations, related links.

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

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