Posted on: 19th Jul, 2007 02:27 am
What is Private Mortgage Insurance please explain in brief?
Welcome Richo,
The PMI or the private mortgage insurance is an insurance policy which every lender would require you to purchase. It is required if you're buying a home with a mortgage loan and can make a down payment less than 20% of your home value.
The PMI or the private mortgage insurance is an insurance policy which every lender would require you to purchase. It is required if you're buying a home with a mortgage loan and can make a down payment less than 20% of your home value.
Hi Richo,
The purpose of a PMI is that, lenders will be able to get back the amount they have offered you as loan in case you default and are unable to pay it off. The insurance coverage will make up for the outstanding balance which you will be unable to pay if you default.
The best thing about the PMI is that, in the current financial year, borrowers going for loans with this insurance policy can deduct the premiums on their tax payments. This is something which the government has come up with towards the end of the year 2006.
To know more about PMI tax deductions, refer to a previous discussion on this topic.
Thanks
The purpose of a PMI is that, lenders will be able to get back the amount they have offered you as loan in case you default and are unable to pay it off. The insurance coverage will make up for the outstanding balance which you will be unable to pay if you default.
The best thing about the PMI is that, in the current financial year, borrowers going for loans with this insurance policy can deduct the premiums on their tax payments. This is something which the government has come up with towards the end of the year 2006.
To know more about PMI tax deductions, refer to a previous discussion on this topic.
Thanks