Buying a home usually has a monster obstacle - to come up with a sufficient down payment. You can put less than the traditional 20% of the payment, but the lender will probably require you to purchase mortgage insurance.
The concept behind mortgage insurance is the same as the other insurance plans. You pay a monthly insurance protects the mortgage lender in case of non-payment of premiums. There are two types of mortgage insurance: the Government and the private sector.
What is private mortgage insurance? (PMI)
PMI is insurance in favor of the mortgage lender, not yours. This is often a necessary concession when the down payment to buy a home is less than 20%. Since the lender is an additional risk by accepting a smaller amount of money to buy seeds, often ask the borrower to purchase private mortgage insurance.
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