Mortgage Insurance


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Mortgage Insurance

An insurance policy that provides coverage to a lender in the event that a borrower defaults on a mortgage. This ensures that the lender does not incur a loss if the borrower is unable to repay the loan. While the lender pays the premium, it generally passes on payment to the borrower (and may roll it into the monthly mortgage payment). A lender may require a borrower to pay for mortgage insurance in certain high risk situations. See also: Loan-to-Value Ratio.

Mortgage Insurance

Insurance provided the lender against loss on a mortgage in the event of borrower default.

In the U.S., all FHA and VA mortgages are insured by the federal government. On other mortgages, the general practice is to require mortgage insurance from a private mortgage insurer when the loan amount exceeds 80% of property value. Borrowers pay the insurance premium in all cases. See Private Mortgage Insurance.

References in periodicals archive ?
The approval by the Wyoming Department of Insurance marks a significant milestone for National MI, as we are now able to provide mortgage insurance in every state in the U.
The capital investment in National MI demonstrates that private investors are prepared to assume mortgage risk as the government looks to decrease its role in the mortgage insurance market," says Shuster.
Mortgage insurance premiums are deductible as qualified mortgage interest if the premiums are paid or accrued in connection with acquisition indebtedness for a qualified residence.
The suite of tools from RealEC also ensures the lender that they will have access to Mortgage Insurance products even if one Mortgage Insurance Company is unavailable.
The basis for the monoline structure dates back to the original form of mortgage insurance in the early 1900s, when losses in other property/casualty business lines took surplus away from mortgage insurers.
Private mortgage insurance is usually required by lenders if a borrower makes less than a 20 percent down payment on a home.
For example, lenders usually require a borrower to purchase mortgage insurance from a public or private mortgage insurer if the down payment is less than 20 percent of the home's appraised value.
Under Fitch's proprietary mortgage insurance capital model, these capital resources comfortably supported both the $23.
Borrowers closing loans to purchase homes or refinance in 2007 who have annual household incomes of $100,000 or less will be able to deduct the full cost of their mortgage insurance premiums on their federal tax returns.
At the same time, the sharing of risk and reward can make captive reinsurance a beneficial tool for the mortgage insurance companies that offer the structures to lenders.
Private mortgage insurance is required by lenders for borrowers who make down payments of less than 20 percent of the home price.
Most borrowers purchase homes or refinance an existing mortgage without mortgage insurance because they generally want to avoid the added costs of the insurance.

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