PMI or Private Mortgage Insurance is provided by a private company to protect the mortgage lender against losses that might be incurred if a loan defaults. It can make a big difference in how quickly your mortgage loan is approved and how much money you spend on a down payment. It is required if the loan amount is more than 80% of the home’s value.
This insurance benefits lenders and investor, but it also helps homebuyers too. Without mortgage insurance, we would need to require a down payment of at least 20% of the loan amount. We understand that even if you have enough money for a large down payment, you may prefer to use it for other purposes.