Private Mortgage Insurance – What Is PMI?
If you’re purchasing a home with a conventional loan and make a down payment that falls below 20% of the purchase price, your lender may require that you pay private mortgage insurance (PMI). PMI (Protective Mortgage Insurance) shifts risk away from lenders to insurers until you reach a certain amount of equity in your property. While it’s an initial expense that helps you purchase sooner and build equity faster, it can have significant long-term benefits in the long run. What is PMI? Private mortgage insurance