What is a PMI?
Private mortgage insurance, or PMI, is insurance against a loss by the lender resulting from the default of the borrower. This type of insurance, as denoted in its name, is issued by a private insurance agency and not the government as is FHA and VA insurance. The insurance premium is paid by the borrower and is included in his monthly mortgage payment. Private mortgage insurance is required on conforming loans when borrowing more than 80% of the home’s value on a first mortgage.
