| |
| Real Estate Terms -> What is Mortgage Insurance (MI, PMI, MIP) |
Mortgage Insurance (MI, PMI, MIP)
|
 |
| Q: |
 |
|
What is Mortgage Insurance (MI, PMI, MIP)? |
| |
| A: |
|
|
In the old days, lenders only offered home loans that required 20% down payments. The down payment was considered to be security for the lender because the home buyer would be more likely to make their payments and not allow the home to go into Foreclosure because if the did, they would loose their down payment. In order to provide lower payments, insurance companies began offering Mortgage Insurance (MI) to lenders which would match this protection. The home buyer pays for this insurance through an up front premium and/or a monthly premium. Conforming Loans of less than 20% down will often require PMI (Private Mortgage Insurance) and all FHA loans require MIP (Mortgage Insurance Premium). |
| |
|
|
Disclaimer:
Do not rely on these definitions for any purpose other than providing an understanding of the concepts in our web site. More... |
|
|
