PMI (Private Mortgage Insurance)

PMI is an insurance that most lenders require of all borrowers who put less than 20% down. It’s purpose is to protect the lender against losses should the borrower default.

Private Mortgage Insurance, or PMI, is insurance required by the bank or lender providing financing if the LTV, or loan-to-value is greater than 80%. PMI is important because it protects the bank or lender in the case that a borrower with a very high LTV defaults on their mortgage. And it is said to benefit the borrower by allowing them to finance a property with very little down in one single loan.

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