Insurance required when a borrower puts down less than 20% on a conventional home loan, protecting the lender against default.
Private Mortgage Insurance (PMI) protects the lender — not you — if you default on your mortgage. It's required on conventional loans when your down payment is less than 20%.
Typically 0.5%–1.5% of the loan amount per year, added to your monthly payment. On a $300,000 loan: $125–$375/month.
The yearly cost of borrowing money expressed as a percentage, including fees and interest.
Interest calculated on both the initial principal and the accumulated interest from previous periods.
The process of spreading loan payments over time so each payment covers both principal and interest.
A ratio measuring the gain or loss from an investment relative to its cost, expressed as a percentage.
The total value of all assets minus all liabilities, representing overall financial health.
The ownership value in an asset after subtracting any debts owed against it.