Is mortgage insurance required
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Mortgage Insurance: What It Is, How It Works, Types
What Is Mortgage Insurance?
Mortgage insurance is an insurance policy that protects a mortgage lender or titleholder if the borrower defaults on payments, passes away, or is otherwise unable to meet the contractual obligations of the mortgage.
What is mortgage insurance and how does it work
Mortgage insurance can refer to private mortgage insurance (PMI), qualified mortgage insurance premium (MIP) insurance, or mortgage title insurance. What these have in common is an obligation to make the lender or property holder whole in the event of specific cases of loss.
Mortgage life insurance, on the other hand, sounds similar, but is designed to protect heirs if the borrower dies while owing mortgage payments. It may pay off either the lender or the heirs, depending on the terms of the policy.
Key Takeaways
- Mortgage insurance refers to an insurance policy that protects a lender or titleholder if the borrower defaults on payments, passes away, or is otherwise unable to meet the contractual obligations of the mortgage.
- Three types of mortgage insurance include private mo