What is PMI?

Private mortgage insurance (PMI) is a supplemental insurance policy required for some mortgages with a down payment lower than 20%. Borrowers typically pay between 0.5% and 1% of the original loan amount for PMI each year until you build up at least 20% equity in your home. If a borrower falls behind on loan payments, PMI will not reduce the risk of foreclosure. The SESLOC First-Time Homebuyer Mortgage does not require PMI.