Mortgage Insurance

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Mortgage Insurance

Private mortgage insurance (PMI) is required for homebuyers who make a down payment of less than 20% on the value of their property. Because the borrower has less equity on their property, the mortgage lender requires that the borrower purMortgage Insurance insurance so their loan will be protected. The premium calculated on PMI is based on the equity that the borrower has on the property. The less equity there is, the higher the premium rate calculated for private mortgage insurance. Once the homeowner’s equity becomes more than 20% of the home value, buying mortgage insurance is no longer required.


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