Purchasing Managers' Index (PMI)
An indicator of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment. Investopedia Says:
A PMI of more than 50 represents expansion of the manufacturing sector, compared to the previous month. A reading under 50 represents a contraction, while a reading at 50 indicates no change. Prior to September 1, 2001, the acronym (PMI) stood for Purchasing Managers' Index. The Institute of Supply Management (ISM) now uses only the acronym, PMI.
Although the ISM publishes several indexes, the PMI is the most widely followed and is sometimes referred to as the ISM index. Related Terms:
Inventory
Logistics
NY Empire State Index
Supply Chain
Supply Management
Supply-Chain Management Private Mortgage Insurance (PMI)
A policy provided by private mortgage insurers to protect lenders against loss if a borrower defaults. Most lenders require PMI for loans with loan-to-value (LTV) percentages in excess of 80%. This allows the borrower to make a smaller down payment of as low as 3%, instead of about 20%, and usually requires an initial premium payment and possibly an additional monthly fee depending on the loan's structure. Investopedia Says:
Keep track of your payments on the principal of the mortgage. When you reach 80% equity, notify the lender that it is time to discontinue the PMI premiums. To make it easier, lenders are now required to tell the buyer at closing how many years and months it will take for them to pay 20% of the principal to cancel PMI. However, U.S. law does allow lenders to continue requiring PMI all the way down to 50% equity for so-called high-risk borrowers. Traditionally, loans considered high risk include reduced documentation loans, in which customers provide less proof of income and other information during the approval process. Loans for people with poor credit histories and higher debt-to-income ratios also fall into this category. Related Terms:
80-10-10 Mortgage
Closing
Down Payment
HUD-1 Form
Lender-Paid Private Mortgage Insurance
Loan-To-Value Ratio
Mortgage
Mortgage Broker
Mortgage Life Insurance
Real-Estate Agent |