What Is Mortgage Insurance (Also PMI or MIP)?

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Mortgage insurance protects the investor if the borrower defaults on the loan. It lowers the investor’s risk when funding a home loan.

In most cases, if you pay at least 20% down on your home, you’re not required to carry mortgage insurance.

• If you are required to carry mortgage insurance, removal of the insurance may occur when the equity in your home reaches a certain percentage.

Note: Depending on the type of loan you have, your mortgage insurance may go by different names. It can be called Private Mortgage Insurance (PMI) or Mortgage Insurance Premium (MIP).

Further reading

Who Needs Mortgage Insurance?