Mortgage insurance offers protection for the mortgage lender in the unlikely event of a default on the mortgage. Mortgage insurance is NOT insurance for the homebuyer. It is a separate insurance from homeowner’s insurance or life insurance. Mortgage insurance premiums are paid by the homeowner, and are required on loans that have a loan to value ratio above 80% (for example, a loan with less than a 20% down payment). FHA mortgages always require mortgage insurance.
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