YOU ASK:

What is the definition of Private Mortgage Insurance?

WE ANSWER:

Private Mortgage Insurance (also called a lenders mortgage insurance) provides protection to the creditor or lender in the event that the borrower (the mortgagee) defaults on his mortgage loan.

This insurance is required before a proposed borrower is allowed to take on a mortgage. It is usually the lender that will buy this insurance and will just pass on the cost to the borrower as part of the mortgage fees.

Private Mortgage Insurance is commonly taken for mortgages where the down payment is at 20% of the property value or less.

Mortgage insurance is only issued once the borrower meets certain criteria - such as the borrower's requirements (financial history, credit rating, etc.), the size of the mortgage and the type of property the mortgage will cover.

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