• Your Mortgage Team
• Loan Preparation
• Mortgagee Clause
• Types of Loans
• What is FHA?
• When to Refinance?
• Home Buyers Guide
• What is Credit Score?
• Mortgage Insurance
• Glossary of Terms
• Your Loan Progress
• Useful Forms
• Common FAQs

Mortgage Insurance

Mortgage insurance is a financial guaranty for the lender that will help to reduce or eliminate a loss in the case of a default by the borrower, and it is almost universally required on loans where there is less than 20% downpayment equity.

That means if you are purchasing a home with less than 20% down or refinancing to more than 80% of your homes value, you are going to be required to pay mortgage insurance.

In other words, mortgage insurance spreads the risk between the lender and the insurance company.

What is FHA Mortgage Insurance?

FHA mortgage insurance provides lenders with protection against losses as the result of homeowners defaulting on their mortgage loans.  The lenders bear less risk because FHA will pay a claim to the lender in the event of a homeowner's default.  Loans must meet certain requirements established by FHA to qualify for insurance.