It pays to understand private mortgage insurance

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It's almost impossible to listen to the radio or read a newspaper without encountering an ad for low- or no-down-payment home loans. If you are considering buying a house or condominium, or refinancing your current home, it pays to understand the pros and cons of these high loan-to-value-ratio mortgages. WHAT IS P.M.I. (PRIVATE MORTGAGE INSURANCE)? Unless you obtain a government-sponsored VA (Veteran's Administration) or FHA (Federal Housing Administration) home loan for all or most of the market value of your home, you will probably encounter PMI. Purchase Bob Bruss reports online. PMI insures conventional mortgage lenders, such as banks, credit unions and mortgage bankers, against foreclosure losses on the mortgage amount exceeding 80 percent of the home's value. For example, suppose you buy a $200,000 house or condo for nothing down with a $200,000 PMI mortgage. In addition to your monthly principal and interest mortgage payment, plus property taxes, you will also have to pay a PMI ...