Private Mortgage Insurance (PMI)

Private Mortgage Insurance (PMI) is a type of insurance that homebuyers might be required to purchase if they are unable to make a down payment of at least 20% of the home’s purchase price. PMI protects the lender, not the borrower, in case the borrower defaults on the loan. Lenders typically require PMI for conventional loans when the loan-to-value (LTV) ratio exceeds 80%.