What is mortgage insurance or PMI?
Mortgage insurance is a requirement by many lenders to protect against loan default and property foreclosure. Essentially, it is an insurance policy the lender requires in the event the borrower defaults on his or her payments. PMI is typically required on mortgages with lower down payment amounts. As a rule of thumb: if your down payment or equity is less than twenty percent, you will likely be required to pay for mortgage insurance.
