A guide to understanding mortgage insurance and your options 

Private mortgage insurance or PMI is a requirement by mortgage lenders when you do not have twenty percent equity in your home. This insurance policy is generally paid monthly in addition to your house payment and protects the lender in the event your were to default on your mortgage. PMI may now be considered tax deductible and you should review this with your cpa. If you have excellent credit and have a minimum of fiver percent equity in your property then you should find out if you qualify for a lender paid pmi program which allows you to pay the pmi insurance in a lumps sum upfront. This can potentially save you hundreds of dollars per year. If you are faced with a loan scenario that requires mortgage insurance, then you should compare mortgage quotes from different lenders as they use different insurance companies to cover the mortgage insurance and this could save you hundreds of dollars per year. 

11-13-2007 © LoanNetwork.com

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