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There are several types of mortgage insurance. The one that everybody complains about is private mortgage insurance (PMI). Homeowners with private mortgage insurance have to pay a hefty premium and the insurance doesn't even cover them. Yes, private mortgage insurance offers zero protection for the borrower. Borrowers mistakenly think that private mortgage insurance makes them special, but there are no private services offered with this kind of insurance. A lesser known type of mortgage insurance is the type that pays off your mortgage if you die. In other words, you pay a small premium for a small chance of dying. You could probably get better protection through a life insurance policy. The type of mortgage insurance most people carry is the type that ensures the lender in the event the borrower stops paying the mortgage. Nonsensicle, but private mortgage insurance ensures your lender. Why Do You Pay for Private Mortgage Insurance? Many borrowers take out private mortgage insuranc...

What is Mortgage Insurance Mortgage insurance is an insurance policy that protects a mortgage lender or title holder in the event that the borrower defaults on payments, dies or is otherwise unable to meet the contractual obligations of the mortgage. Mortgage insurance can refer to private mortgage insurance (PMI), qualified mortgage insurance premium (MIP) insurance or mortgage title insurance. What these have in common is an obligation to make the lender or property holder whole in the event of specific cases of loss. Mortgage life insurance, on the other hand, which sounds similar, is designed to protect heirs if the borrower dies while owing mortgage payments. It may pay off either the lender or the heirs, depending on the terms of the policy. BREAKING DOWN Mortgage Insurance Mortgage insurance may come with a typical pay-as-you-go premium payment, or it may be capitalized into a lump-sum payment at the time of mortgage origination. For homeowners who are required to have PMI becau...