What does MMI refer to when included in mortgage payments?

When MMI is included in mortgage payments, it typically refers to "Mortgage Monthly Insurance." This term is relevant in the context of calculating monthly housing costs that lenders use to determine a borrower's ability to repay a loan. The inclusion of MMI in the mortgage payments signifies that it is added to other essential elements of the monthly payment, specifically principal and interest, along with taxes and possibly insurance.

The correct understanding of MMI is that it is part of a broader calculation that encompasses PITI—Principal, Interest, Taxes, and Insurance. This aggregation gives a complete picture of what a borrower is responsible for each month and is critical in the lending process, helping ensure that the borrower can meet all obligations, including any required insurance related to the mortgage.

Considering the choices given, the connection between MMI and PITI reflects the comprehensive approach lenders use in evaluating mortgage payments, which helps to ensure that potential borrowers are fully aware of their financial commitments.