Private Mortgage Insurance (PMI)
PMI is insurance that protects the lender against certain losses if a borrower defaults on a mortgage, commonly associated with higher-LTV loans. Federal rules under the Homeowners Protection Act framework establish uniform procedures for borrower-requested cancellation and for automatic termination of borrower-paid PMI for many covered mortgages.
- Where it applies
- Federal
- When it comes up
- Underwriting; post-closing/servicing
- Property types
- Residential (conventional)
In practice
Servicing systems must track "original value," scheduled amortization, and payment status to determine statutory cancellation/termination dates.
Read more in the Knowledge Base
- Refinancing and Prepayment StrategyBuyers
- Post-Closing Liquidity - What Co-op Boards Actually RequireBuyers
Related terms
Residential Financing
- Accrual Rate
- Adjustable Rate Mortgage (ARM)
- Amortization
- Application (TRID application)
- Conforming Loan Limit
- Pay Rate
- PMI Automatic Termination
- PMI Cancellation (Borrower-Requested)
- Secured Overnight Financing Rate (SOFR)
- TILA-RESPA Integrated Disclosures (TRID)
General information, not legal, tax or financial advice.