PMI (Property Mortgage Insurance)–Definition

You may or may not have heard of this or you may not understand what this line item is. Let me give you the 411 on this neat little line item that Mortgage companies have thrown into hundreds of thousands of loans to “protect” themselves in the chance that they have to foreclose on people. By the name you may believe that this is insurance on your house, and I believe there are people out there that believe this is for fire, theft, damage, etc. It is not!!! What it is, it is a “fund” that the Mortgage Company has created to collect money each and every month from clients, this off-sets the costs when/if they have to foreclose on someone. There are different rules on each Mortgage so you will have to contact your Mortgage Company. If you have been paying on time for some time, anywhere from 2-5 years, and you may or may not need to be under a certain LTV (Loan-to-Value, another definition I covered previously), you can get this dropped. I have a client that is jumping through the hoops right now to get it dropped, the banks do not make it easy, but it will be well worth the trouble once they are no longer paying it.

So look at your Mortgage, sometimes, the banks lump it in with escrow, so you have to take a careful look, you will have an area that breaks down your escrow, look carefully, they all use different names for it. Usually Hazard Insurance, which is the real insurance usually on your house, then your taxes. If there is another line item, as I said they may have a ton of different names for it, it may be pulled monthly, quarterly, or yearly. If you have any questions, looking at it, please don’t hesitate to call/email, I have seen a PMI charge of 147 per month, yes per month!!! Please check your mortgage, and again contact me with any questions.

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~ by debt2dreams on March 3, 2009.

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