mortgage insurance provided by a commercial insurer, as opposed to a government agency, when the mortgage loan-to-value ratio is below 80% of the property's appraised value at loan closing. Mortgage insurance, usually added to the borrower's loan payments, is available from three companies: Mortgage Guaranty Insurance Company, Milwaukee; PMI Group, San Francisco; and Radian Group, Philadelphia.
type of insurance available from lenders that insures against loss resulting from a default on a mortgage loan and can substitute for down payment money.
insurance written by a commercial insurance company that indemnifies the mortgage lender in the event there is a default on the mortgage.
default insurance on conventional loans, provided by private insurance companies. See mortgage insurance. The Homeowner's Protection Act of 1998 allows PMI to be canceled when the amount owed reaches a certain level, particularly when the debt is less than 80% of the home's value, and automatically when the loan principal is less than 78% of its original cost.
Example: Lawton wishes to obtain a home purchase loan covering 90% of value. The lender requires Lawton to acquire private mortgage insurance as a condition for granting any loan for more than 80% of value.
