PMI. Who Benefits
A new loan I was just quoted included PMI - heard of it-never paid it. Here a question WHO is protected? Does the buyer get some sort of "policy" - since the buyer (debtor) will pay the premiums? How does all that PMI stuff work? Just trying to learn. Thanks.
All you need to know about it is stay away from it if possible. The only one that benefits is the lender. They put private mortgage insurance in place whenever you go over 80% LTV to cover their increased risk. One way to beat it is to ask for an 80/20 if you need 100% financing. You have to write a second check every month but it will save you $100 + per month. There are many 100% programs out there with no pmi, you just have to look for it.
Larry