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Insurance - Private Mortgage Insurance
What is private mortgage insurance (PMI)?
If the borrower stops paying the loan, PMI is a policy that protects the lender by paying the costs of foreclosing on a house. PMI usually is required if the down payment is less than 20 percent of the sale price.
Although PMI protects the lender, it is paid monthly by the borrower.
I applied for a mortgage loan and the bank is forcing me to buy private mortgage insurance (PMI). Can it do this?
Yes. PMI usually is required if the down payment is less than 20 percent of the sale price.