Definition: Insurance generally required by the lender, to be paid by the borrower, when the borrower has made less than a 20% down payment on the mortgage. This insurance helps to protect the lender if the mortgage enters default.
You must apply for private mortgage insurance like you would a mortgage and you may not qualify. It is possible to qualify for the mortgage, but not the private mortgage insurance. In this case, it may not be possible for you to take out a mortgage, even if you are qualified with the bank or other financial institution.
Some borrowers may qualify for government-subsidized private mortgage insurance through the Federal Housing Administration. The cost may be lower than through a larger private insurer.
See Also: Adjustable Rate Mortgage, Fixed-Rate Mortgage, Federal Housing Administration (FHA)
Definition: To have some or all of the penalties removed on debt owed. Penalties may be accrued on both taxes owed or as a result of breaches of contract signed with a lender during a loan agreement. Penalty Abatement may occasionally be negotiated as part of a settlement or installment agreement as a good faith show on the part of the tax entity or financial institution and to reduce the likelihood on the part of the credited for additional failure to pay.
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