Home

 

   Upfront 
   Mortgage 
   Brokers


Fixed-Markup Lender

Upfront 
Mortgage Lenders

 

Table of Contents

Glossary

Tutorials

Mistakes 
to Avoid

 

   House
   Shoppers

House 
Purchasers

   House 
   Owners

 

 Calculators

 Spreadsheets

  

Public Policy

Leave 
Question/
Comment

 


 

  

 

 

 

 

 

 

 

...................

 

Who Does Mortgage Insurance Protect?
March 27, 2006, Reviewed November 2, 2007

Mortgage insurance protects the lender against loss in the event that the borrower defaults. The borrower pays the premium, but the lender receives the protection.

 Mortgage insurance has no connection to any kind of life insurance, and pays no benefits to borrowers. The sole benefit received by the borrower is that, with mortgage insurance, lenders are willing to make loans with down payments smaller than 20% of purchase price or appraised value.

As to why borrowers pay for insurance that protects only the lender, see Why Do Borrowers Pay For Mortgage Insurance?

Copyright Jack Guttentag 2007