Thread: Mortgage Insurance

Mortgage Insurance

Mortgage insurance is an insurance policy designed to protect the mortgagee (lender) from any default by the mortgagor (borrower). It is used commonly in loans with a loan-to-value ratio over 80%, and employed in the event of foreclosure and repossession.

This policy is typically paid for by the borrower as a component to final nominal (note) rate, or in one lump sum up front, or as a separate and itemized component of monthly mortgage payment. In the last case, mortgage insurance can be dropped when the lender informs the borrower, or its subsequent assigns, that the property has appreciated, the loan has been paid down, or any combination of both to relegate the loan-to-value under 80%.

In the event of repossession, banks, investors, etc. must resort to selling the property to recoup their original investment (the money lent), and are able to dispose of hard assets (such as real estate) more quickly by reductions in price. Therefore, the mortgage insurance acts as a hedge should the repossessing authority recover less than full and fair market value for any hard asset.

Good info - thanks!

In addition to that it can also protect you as a borrower against having to pay a deficiency balance after sale of your home after foreclosure.

thanks for information , i m recently agree with you ,there are few people who share this type of information
thanks a lot.

Hello, I certainly agree with you. Thank you very much for sharing your information. It was really very helpful for me.
Thanks for sharing information.





Insurance Company

Thanks for the information, there are lots of sites online which have a lot of useful advice!

I've had a quick look and found some good sites on mortgage insurance. This one is great for choosing a mortgage and insurance, this one has a good article on whether it's time to review your mortgage insurance.

This is a really good article from the Guardian about where you should buy your mortgage insurance.

Hope that helps!

In Canada we have the first time home-buyers plan that significantly reduces the insurance cost for first time home buyers who want to put as low as 5% down.

In the UK this insurance is known as a Mortgage Indemnity Guarantee (MIG) and is payable by the borrower over a specified loan-to-value by way of a Higher Lending Charge.