What does PMI stand for?

PMI stands for Private Mortgage Insurance. It is a type of insurance that lenders require from borrowers when their down payment on a home is less than 20% of the property's purchase price. The purpose of PMI is to protect the lender in case the borrower defaults on the loan. By having this insurance in place, lenders are willing to extend credit to borrowers who may not have a significant amount of equity in their property, thus increasing the accessibility of homeownership for those who may not have substantial savings.

The other options do not accurately represent the term used in the mortgage industry. Professional Mortgage Insurance, Personal Mortgage Insurance, and Property Mortgage Insurance do not exist in the same context or serve the same purpose as Private Mortgage Insurance, which is specifically tailored to protect lenders from the increased risk associated with lower down payments.