PMI

Definition

Private Mortgage Insurance—extra insurance you pay when your down payment is less than 20%, protecting the lender if you default. It's insurance that only benefits the bank while you foot the bill.

Example Usage

My PMI costs $150/month, which is really just a tax on being unable to afford a 20% down payment.

Origin

Insurance product developed in the 1950s to enable lower down payments

Fun Fact

PMI can be removed once you reach 20% equity, but you have to request it—lenders won't volunteer to stop collecting your money.

Source: Mortgage insurance terminology

Related Terms

Intermediate

assessing

The art of determining property value for tax purposes, usually performed by a government official who will inevitably conclude your home is worth more than you claimed. This process involves evaluating comparable sales, property features, and market conditions to establish a taxable value. It's the reason your property tax bill keeps going up even when your neighborhood looks exactly the same.

🏠 Real Estate

Intermediate

Escrow

A financial limbo where your money sits in someone else's account while everyone argues about who gets what. It's basically a trust exercise designed by lawyers who don't trust anyone.

🏠 Real Estate

Beginner

Curb Appeal

The art of making a house look irresistible from the street so buyers fall in love before noticing the interior looks like a crime scene. A fresh coat of paint and some petunias can apparently add fifty thousand dollars to a listing.

🏠 Real Estate

Advanced

air rights

The property rights to use the vertical space above a parcel of land, which can be sold separately from the land itself. In dense cities, this lets you literally monetize thin air by selling the right to build above your property.

🏠 Real Estate

Beginner

auction

A socially acceptable form of gladiatorial combat where participants wave paddles and bankrupt themselves in public, all for the thrill of outbidding strangers. The highest bidder wins the dubious honor of paying more than everyone else thought something was worth. Popular in real estate, art, and estate sales where dead people's stuff finds new homes.

🏠 Real Estate

Intermediate

conservancy

An organization dedicated to preserving natural resources, land, or historical sites through acquisition, management, and protective agreements—basically wealthy nature lovers buying up property so developers can't turn it into strip malls. These groups use conservation easements, donations, and purchases to maintain ecosystems, wildlife habitats, and scenic areas. It's environmentalism with a real estate portfolio.

🏠 Real Estate

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