Real Estate Express: PMI *and* Insurance?

[David Miller]

I'm still doing the pre-license course. I'm writing it all down in a big note book to help me memorize it all.

I came across this on Real Estate Express' course.

My question: Why does this list both PMI (Private Mortgage Insurance) AND Insurance? What's the difference?

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Conventional Insured Loans

Unlike the conventional loans listed above, these loans require less than 20% down payment but they also require mortgage insurance which protects the lender (not the home buyer!).

PMI (Private Mortgage Insurance) is charged at the beginning of the loan and may also be part of the monthly payment so the payment becomes PITI, Principle, Interest, Taxes, Insurance and PMI Insurance. The mortgage insurance is purchased from a private company, not the federal government. Both the real estate professional and the buyer should understand that PMI is to protect the lender from default of the buyer, not insure the buyer's life.

Typical payment of Conventional Insured:

• Principal and interest payment $700
• Taxes $150
• Insurance $ 70
• PMI $60
• Total $980 per month