What is borrower-paid mortgage insurance (BPMI)?

BPMI stands for "borrower-paid mortgage insurance." It is a type of mortgage insurance that is paid for by the borrower, rather than the lender or investor. BPMI is typically required when a borrower makes a down payment of less than 20% of the home's purchase price, and it is intended to protect the lender in case the borrower defaults on the loan. The cost of BPMI is typically added to the borrower's monthly mortgage payment. It can usually be cancelled when the borrower reaches a certain level of equity in the property.