If you’re unable to make a down payment of 20% or more on a conventional mortgage, there’s a good chance you’ll have to pay private mortgage insurance (PMI).
PMI, which is arranged through a third-party insurance company, is designed to protect the lender if you’re unable to make payments. PMI doesn’t protect you against loss — if you don’t make payments, you could still face foreclosure — and it won’t prevent your credit score from dropping if your mortgage payments are late.
