Mortgage Insurance (MI) is a misunderstood topic in real estate and is used when buyers use financing and their down payment is less than 20% of the purchase price. This insurance protects the lender from loss in the event of a borrower defaulting on the loan, and premiums are paid upfront, monthly, or both, depending on the loan program and MI requirements. Private Mortgage Insurance (PMI) is issued by specialty insurance companies for conventional loans with less than 20% down payment and the premiums depend on initial LTV, credit score, property type, etc.
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