What does the acronym PMI stand for in mortgage lending?

The acronym PMI stands for Private Mortgage Insurance. This type of insurance is typically required by lenders when a borrower is unable to make a large down payment, generally less than 20% of the home's purchase price. PMI protects the lender in case the borrower defaults on the loan. It is an important aspect of mortgage lending as it allows borrowers to obtain financing even with a smaller down payment, thereby making home ownership more accessible.

In this context, the other options do not accurately represent the term used in the industry. Property Mortgage Insurance, Primary Mortgage Insurance, and Permanent Mortgage Insurance are not terms commonly employed or recognized in relation to what PMI refers to in mortgage lending. The term "private" specifically denotes that the insurance is provided by private companies rather than a government agency, which is a critical distinction in understanding PMI's function and relevance in the mortgage process.