Mortgage Insurance or PMI
Private Mortgage Insurance (PMI) is a type of insurance that lenders typically require borrowers to purchase when they have a conventional mortgage loan and make a down payment of less than 20% of the home's purchase price. The purpose of PMI is to protect the lender in case the borrower defaults on the loan.
PMI allows borrowers to obtain a mortgage with a lower down payment, but it adds an additional cost to the monthly mortgage payment. The cost of PMI can vary, and it is usually based on the loan-to-value ratio (LTV) and other factors.
It's important to note that PMI is different from other types of mortgage insurance, such as the insurance associated with government-backed loans like FHA loans or VA loans. PMI is specifically related to conventional loans.
If you have questions about a specific aspect of PMI or mortgage insurance, feel free to provide more details, and I'll do my best to assist you.
