PMI insures your lender for part of your loan, not the full amount, if the loan is not repaid. This typically applies to conventional loans.
PMI may be necessary when a down payment is below 20%. Depending on the credit history of the homebuyer, PMI may cost between approximately 0.25% – 2.00% of the amount borrowed. And if you eventually build 20% equity in your home, you may be able to ask the lender to cancel the PMI.
An FHA loan is an insured loan made by the private lender that allows borrowers to purchase with a down payment as low as 3.5%.
VA loans don’t have any PMI requirements even though they allow a 0% down payment, but have a VA Funding Fee.