Private Mortgage Insurance (PMI) is often required by lenders when homebuyers put down less than 20% on a mortgage. Understanding PMI lender requirements can help you better prepare for the homebuying process and secure your dream home.
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Lenders typically require PMI to protect themselves against risk in case of default. To qualify, buyers must meet specific criteria, including:
- Credit Score: A strong credit score (usually 620 or higher) increases your chances of qualifying for a mortgage with PMI.
- Debt-to-Income Ratio (DTI): Lenders prefer a DTI below 43%, as it demonstrates your ability to manage monthly payments.
- Consistent Income: A stable income source reassures lenders that you can meet your financial obligations.
