What is mortgage insurance?
The Bankrate.com financial term of the day is: "Mortgage Insurance," also known as "Private Mortgage Insurance," or "PMI."
Mortgage insurance -- also known as private mortgage insurance, or PMI -- is something that's generally dreaded by homebuyers: a monthly charge on top of your mortgage payment. The insurance covers a lender's foreclosure costs in case a borrower stops making house payments. You usually get stuck paying PMI premiums if the down payment on your home is less than 20 percent.
Mortgage insurance -- alias private mortgage insurance, or PMI -- can raise your monthly housing bill if your down payment is relatively modest.
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