A type of line of credit loan coveted by consumers that fixes the interest at the prime rate for the life of the loan. The rate of interest charged by banks to their best and most creditworthy customers. This fluctuating rate is often used as part of the variable rate of interest in a home equity line of credit . The money still owed on the original amount of the mortgage, not including interest. PMI is usually required if the down payment is less than 20 percent of the sale price.
Home buyers pay for the coverage in monthly installments.
PMI is usually terminated when the home buyer has built up 20 percent equity in the property. Refinancing Securing a new loan in order to pay off the existing mortgage or to gain access to the existing home equity . In a home equity line of credit , that portion of the life of the loan that follows the draw period . During the repayment period, the borrower cannot take out any more money, but must pay down the loan. Reverse mortgage See home equity conversion mortgage .