Most every buyer needs it if they put less than 20% down on a mortgage.
Lenders usually require a downpayment that equals 20% of a property's value before you can refuse private mortgage insurance or PMI. PMI is basically an indemnity that will protect your borrower's lender against the cost of a foreclosure in the event that one occurs.
When a lender is insured against this type of a loss it makes it possible for them to accept a lower downpayment from the buyer.
This helps the buyer out also so they don't have to come up with as much money at the closing table.
Basically, the private mortgage insurance is providing what the equity of a larger downpayment would have covered satisfying the lender's need to blanket any possible lossess in the event of a foreclosure.
How does PMI work for your clients?
I think it's for the life of the loan now, in some cases !
What are the rules?
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