Private mortgage insurance enables borrowers to gain access to the housing market more quickly, by allowing down payments of less than 20%, and it protects lenders against loss if a borrower defaults.
For the Borrower, private mortgage insurance can provide:
- Access to the housing market more quickly, by reducing the required down payment
- Range of payment options
- Cancellation of Borrower-Paid MI (unlike FHA insurance)
For the Lender, private mortgage insurance can provide:
- Broader range of loan products
- Expanded pool of buyers with lower cash requirements
- Wide range of insurance products
- Faster, easier closes
- Reduced exposure
Reduces Exposure To:
| MI COVERAGE | LOAN TO VALUE (LTV) | ||||
|---|---|---|---|---|---|
| 85% | 90% | 95% | 97% | ||
| 6% | 79.9% | 84.6% | 89.3% | 91.2% | 12 | 74.8 | 79.2 | 83.6 | 85.4 |
| 16 | 71.4 | 75.6 | 79.8 | 81.5 | |
| 17 | 70.6 | 74.7 | 78.9 | 80.5 | |
| 18 | 69.7 | 73.8 | 77.9 | 79.5 | |
| 25 | 63.8 | 67.5 | 71.3 | 72.8 | |
| 30 | 59.5 | 63.0 | 66.5 | 67.9 | |
| 35 | 55.3 | 58.5 | 61.8 | 63.1 | |
The ability to originate loans for borrowers with less than a 20% down payment is critical to serving first-time homebuyers and expanding the opportunity of homeownership.
Private mortgage insurance allows buyers to purchase homes sooner while providing safer loans for lenders.
To learn more about the benefits of mortgage insurance, watch our MI fundamentals videos:
