As a homeowner, you probably are all too aware of the amount of that monthly payment. You might not, however, be aware of that breakdown of that lump sum payment until you review the year-end statement from you lender. If you've noticed it at all, you probably simply note an amount that is designated PMI.
What is it? What is it for? Why am I paying this? If you have ever asked those questions, you may also realize that PMI is a required part of most conventional mortgage payments.
What is PMI?
Private Mortgage Insurance (PMI) is an insurance paid by the borrower to protect the lender against default. If you have a conventional or FHA loan and paid less than 20 percent on the down payment, it's likely that you pay a premium each month to…