Private Mortgage Insurance (PMI)
Insurance provided by a private carrier that protects a lender against a loss in the event of a foreclosure and deficiency. PMI helps borrowers obtain a conventional mortgage loan with a down payment less than 20%, because the insurance provides the lender with funds in the event of borrower default on the loan. This allows the lender to assume more risk. PMI protects the top portion of a loan, usually 20-30%, against borrower default. The borrower pays a monthly premium or fee while PMI is effective, which may be made part of the loan payment. The law requires that the lender automatically terminate the PMI payment if the borrower has accrued at least 22% equity in the home and is current on mortgage payments. On average, PMI is an additional $75/mo per $100,000 borrowed until the 22% equity point is reached.
A form of property ownership where two or more people own the home together. If one of the owners were to die, the remaining tenant(s) get ownership of the whole thing.
Tenants in Common
A form of property ownership where each owner owns a certain percent, such as 50/50. If one owner were to die, their ownership goes to whomever that person has given it to - it could be the other tenants, a family member, etc. Their portion does not automatically go to the other tenant(s).