What is mortgage insurance

is , does it “insure”, why do we need it and what does it do for you?
There are 2 types: Government and Private
Private is called PMI: Private Insurance
Government is called MIP: Mortgage Insurance Premium
PMI can be canceled once you reach 20% equity in your home
MIP is only canceled if you put 10% down or more and keep the loan over 10 years, otherwise your stuck with it for the term of the loan.
The cost of PMI is based on your credit score, loan size and down payment
The cost of MIP is set by the government, and everyone pretty much pays the same.
You can be denied coverage for PMI but not MIP.
Not all private mortgage insurance is the same: you can actually shop the rates online.
Mortgage insurance IS NOT life insurance, it protects the lender against your default on the loan.
It allows Americans to purchase homes with small down payments
as little as 3% with Fannie Mae and Freddie Mac and 3.5% down with FHA

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