QWhat Is Mortgage Insurance?
AMortgage insurance insures the lender against default and foreclosure. If the borrower default on his or her payments and the property is foreclosed, the mortgage insurance company must repay the lender all or a portion of its losses. If you down payment or equity is less than twenty percent, you will be required to pay for mortgage insurance. Don't confuse "mortgage life insurance" with "mortgage insurance". Mortgage life insurance is an optional life insurance policy that you can buy from your insurance agent. It pays off your mortgage in the event of your death.