PMI
Private Mortgage Insurance – this is a type of insurance policy that protects a bank that issues a person a mortgage loan against the loss if the person defaults on their loan. If the borrower fails to pay back their loan, the bank can seize and sell off the house or other property. If the sale does not cover the full amount of the loan, PMI covers the rest. PMI is typically required for borrowers to purchase if they have a down payment of less than 20% of the total loan amount, and borrowers usually want to eliminate the PMI as quickly as possible.
