What does PMI stand for and what is it?
PMI stands for Private Mortgage Insurance.
It is an insurance you buy to protect your lender against loss in case you fail to pay a loan. Most lenders require it if you cannot put a cash down of 20% of the purchase price. Its cost about 0.5% of the loan amount the first year and then lower until you have the 20% equity in the home. It is a tax deductible expense since 2007.