Private mortgage insurance

Most lenders require PMI when a home buyer makes a down payment of less than 20% of the home’s purchase price – or, in mortgage-speak, the mortgage’s loan-to-value (LTV) ratio is in excess of 80% (the higher the LTV ratio, the higher the risk profile of the mortgage). And unlike most types of insurance, the policy protects the lender’s investment in the home, not yours. On the other hand, PMI makes it possible for people to become homeowners sooner—Read more at Investopedia. Fontinelle, Amy. “5 Types of Private Mortgage Insurance – PMI.” 3 June 2019