Why Do You Pay PMI?

Well, the simple reason is you didn't put twenty percent or more down on the purchase. This is the magic number. If you put down less, the lender feels like it is carrying too much of the risk. The more you have invested, the less likely you will just walk away from the property and loan if you have problems. PMI is one way of assuring their position when things go bad with people who fail to put down much on their homes.