If you have a conventional loan, you may be obliged to pay for private mortgage insurance, generally known as PMI.
PMI, like other types of mortgage insurance, protects the lender rather than you if you default on your loan.
Private insurance companies supply PMI, which is negotiated by the lender. When you have a traditional loan and a down payment of less than 20% of the home's buying price, PMI is frequently necessary.
PMI is normally necessary if you're refinancing with a conventional loan and your equity is less than 20% of the home's value.
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