Mortgage Insurance

For most first-time home buyers, saving enough money for a sizeable down payment is the greatest barrier to home ownership. Traditionally, lenders have required a down payment of at least 20 percent of the home's purchase price. However, lenders will approve a mortgage with a smaller down payment if the mortgage is covered by private mortgage insurance.

Private mortgage insurance is insurance that protects a lender in the event that a homeowner defaults on a loan. Lenders generally require mortgage insurance on low downpayment loans because experience and studies show that a borrower with less than 20 percent invested in a house is more likely to default on a mortgage. In effect, the mortgage insurance company shares the risk of foreclosure with the lender.

What is Private Mortgage Insurance?
What is PMI and why do mortgage lenders require PMI.

Can I Cancel PMI?
If you have to get PMI, you do not need it forever. Read how to cancel PMI.

What are my Payment Options?
PMI give you several options, most people choose to add it to their monthly mortgage payment.

How does PMI differ from FHA Insurance?
FHA MIP is similar but understand the difference if you are comparing loan products.