private mortgage insurance
- An insurance policy that a borrower might be required by a lender to secure, which provides coverage in case of inability to repay a home loan. This is often applicable when the borrower's equity in the property is less than 20 percent
- The bank required the purchaser to have private mortgage insurance because they only had 10% down payment on the house.
- Private mortgage insurance is usually necessary when the homebuyer’s down payment is less than 20% of the home’s purchase price.
- To protect their investment, the lender insisted on private mortgage insurance due to the buyer's low equity in the property.