Private mortgage insurance, commonly referred to as PMI, is a specialized type of insurance policy that conventional lenders typically require when a homebuyer puts down less than twenty percent of the home’s purchase price. This requirement exists because lenders view a smaller down payment as a higher risk of default. It is crucial to understand that while the homebuyer pays the premiums for this coverage, the policy solely protects the lender’s financial interest, not the buyer’s. If the
