What Is Private Mortgage Insurance?

The private mortgage insurance is the extra home insurance which the lenders require from the buyers of homes. This insurance is usually required from those home buyers who take loans more than 80% of the value of the home. In other words, the home buyers who put less than 20% down payment are asked to get Private mortgage insurance. This insurance plays a very significant role in the mortgage industry because it protects the interest of lender and reduces the chances of default. If an individual gets a private mortgage insurance, then he may even put less than 5% down payment.