Private Mortgage Insurance is extra insurance that lenders require from most homebuyers who obtain loans.
PMI is a type of mortgage insurance that insures the bank for repayment of the home mortgage. Banks generally make you pay for PMI insurance if you are within 80% of the appraised value of the home financed. For example if you have a home that is appraised at $200,000 and the balance on the mortgage is $160,000 or more then the bank will require you to carry PMI insurance. PMI insurance only covers the bank but the homeowner is the one who has to pay the premium.
PMI and Title insurance are very different. PMI is mortgage insurance for a deposit below 20% on the banking instrument (loan), which is why 80/20 financing eliminates PMI. On the other hand title insurance covers the ownership of the property, if a long lost distant relative with possible claim to the home through the previous homeowner shows up to claim the property, title insurance takes care of this.
No they are not or the death benefit would be taxable. Since you said mortgage insurance I am assuming that you mean PMI or Private mortage insurance and not mortgage life insurance. Yes, mortgage insurance is tax deductible as of 2007. You can see the amount of PMI paid for the year on the final escrow statement that your mortgage lender sends you in December or January.
PMI is not a deductible expense.
A PMI mortgage is a policy issued by a private mortgage insurers, which will protect lenders against the loss of browser defaults. This form of mortgage allows the lender to pay back as little as 3% at a time.
It stands for Private Mortgage Insurance. :))
PMI has absolutely nothing to do with the death of a home owner. There is no benefit to the PMI in this situation. A Mortgage Life Insurance policy would be of great benefit as it would pay off the mortgage on the house at the death of the homeowner.
"Most people do not understand the purpose of PMI insurance. I know it is to protect the mortgage company from risk, but it almost seems like it's just another fee to add to the payment."
With regards to insurance, the acronym PMI stands for Private Mortgage Insurance. This is an insurace where the borrower of a mortgage pays a premium, but if the borrower defaults, the lender gets the money. This helps protect the lender in cases of larger mortgage values.
PMI only covers the Mortgage company or Lender. When PMI pays on a defaulted mortgage note, the buyer then owes the balance of the mortgage to the PMI company. It does not relieve the buyer of the obligation to pay.
You really cant shop around for private morgatge insurance, PMI. Depending on your lender they will include the PMI in your monthly payment. it is just an insurance that will insure you will continue paying you morgatge because you do not have a lot invested in it.
One cannot purchase a PMI calculator, but one can use a PMI calculator to determine how much Private Mortgage Insurance one requires from sites such as Good Mortgage, Money.cnn and Grove Mortgage.