PMI is a Recurring Closing Cost or Prepaid Item. When the loan amount is greater than 80% of the property price/value the lender requires you to have insurance on the loan. This protects the lender in case something happens and the mortgage goes unpaid. The lender will then be able to recoup their losses.
About the Author: Viral "Vic" Joshi
Viral (pronounced like "virile") "Vic" Joshi is an independent California Home loan expert and licensed real estate agent who has been guiding home buyers through the mortgage loan process for over 20 years. Vic is an agent with the Straight Deal Mortgage, offering preferred access to virtually any mortgage loan product available. He is a proud San Francisco Bay Area native, a certified Rescue Scuba Diver and a loyal Warriors fan. Learn more about Vic here or connect on LinkedIn.