Articles by Real Estate Professionals
About PMI - Mortgage Insurance
In addition to their Articles dealing generally with the nature of their
services, the real estate professionals will discuss different specific "Topics"
of interest to buyers and sellers from time to time. These articles are indexed in
the Articles Library for your review.
Author, Jay Westrick is Manager of the Residential Appraisal
Department at OConnor & Associates. He is a Texas State Certified real estate
appraiser. (Lic. #Tx 1327601-R). You may contact the OConnor & Associates
Residential Appraisal Department at (713) 686-9955.
PMI (Premium Mortgage Insurance)
There are three hidden charges in almost every mortgage
payment: (1) homeowners insurance, (2) taxes, and (3) PMI. All three of these hidden
charges increase the cost of owning your home.
PMI is a mortgage term commonly used but little understood. PMI
is an acronym for Premium Mortgage Insurance. PMI is insurance, similar to your car, home
or life insurance. But who does the insurance pay, and when? PMI insurance will pay the
mortgage company when the borrower stops paying or does not pay the mortgage. PMI is
required for people who loan more than 80% loan to value ratio. Banks and major
underwriters of mortgages have determined that when people loan more than 80% of the value
of the home they are a higher risk of defaulting on the loan. PMI is a way of pooling the
risk to lower the individual exposure to default. The cost of PMI varies with the risk
group the individual loan is in and the amount. Usually PMI is $40.00 - $150.00 a month of
your mortgage payment.
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