Mortgage Insurance

If your down payment on a home is less than 20 percent of the appraised value or sale price, you must obtain private mortgage insurance, known as PMI, with your lender. Mortgage Payment Protection Insurance is a form of insurance that ensures that the current mortgage payment will be paid if the borrower proves unable to do so. Mortgage insurance is needed if you have less than 25% down, and the mortgage insurance agencies are very concerned if you're not going to live on the property. Whether you're buying a home for the first time, or refinancing an existing mortgage, someone has probably suggested you purchase mortgage insurance. Private Mortgage Insurance, often abbreviated PMI, is an insurance policy that the bank may make you buy in order to get the loan.