What is Mortgage Insurance?
When buying a home there seems to be a list of fees and costs associated with the actual home purchase price—appraisal costs, home inspection fees, recording fees—today we are going to look at Private Mortgage Insurance (this is different from mortgage insurance associated with FHA and VA Loans); exactly what that cost is and why it is needed.
If you think about the times when you have needed insurance in your life; car insurance, life insurance, and medical insurance, each type is designed to protect you during an unexpected event. Private mortgage insurance is designed to protect your lender should something unexpected happen and the home must go into foreclosures. In short, private mortgage insurance helps shield the lender against potential losses with defaulted mortgage loans.