What Is PMI?
- PMI is extra insurance that lenders require from most homebuyers who obtain loans that are more than 80 percent of their new home's value.
- In other words, buyers with less than a 20 percent down payment are normally required to pay PMI.
Benefits of PMI
PMI plays an important role in the mortgage industry by protecting a lender against loss if a borrower defaults on a loan and by enabling borrowers with less cash to have greater access to homeownership.
With this type of insurance, it is possible for you to buy a home with as little as a 3 percent to 5 percent down payment.
This means that you can buy a home sooner without waiting years to accumulate a large down payment.
If you would like to learn more about the process of getting a home loan, contact us to talk to a loan expert or submit a Loan Advisor request.