What is Mortgage Insurance?
Mortgage insurance (MI) is a financial guaranty for the lender that will assist to reduce or eliminate a loss in the case the borrower defaults on their mortgage. MI is almost universally required on loans where there is less than 20% equity. This means that if you are purchasing a home with less than twenty percent down or refinancing to more than 80% of your homes’ value, you are required to pay mortgage insurance. Simply put, mortgage insurance spreads the risk between the lender and the insurance company.
Two types of Private Mortgage Insurance
(BPMI) Borrower-Paid Private Mortgage Insurance – for more information click here...