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Danielle Frobisher - October 4th, 2004 6:04 PM

I keep hearing about PMI especially if you don't pay a lot of money on your downpayment. What exactly is it?

Erin Tan - October 4th, 2004 6:01 PM

Private Mortgage Insurance is mandatory if your downpayment is low (less than 20% of house sale). This protects the mortgage lender from any problems, should you not be able to keep up with payments.

Fred - October 4th, 2004 6:04 PM

Yep...PMI is essentially extra payment you have to the mortgage lender, since your downpayment wasn't big enough. Another way they screw you!

allanwiller - July 16th, 2013 9:48 AM

Mortgage companies rely on mortgage insurance to protect themselves from defaulting mortgage borrowers. If a mortgage buyer does not make the payments, then the insurance company pays to the mortgage company. Mortgage companies buy their insurance from insurance providers and pay premiums on the same. These premiums are then passed on to the buyers of the mortgage. Buyers may have to pay for the premiums on an annual, monthly or single-time basis. The insurance payments are added to the monthly payments of the mortgages. Mortgage insurance policies

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