Mortgage insurance protects the lender in the event an insured is unable to afford their loan payments. This coverage pays the lender a portion of the loan principal, though the homeowner will still be responsible for the loan balance and is vulnerable to foreclosure if they don't catch up on payments.
The upside of mortgage coverage for the insured is that it can allow a buyer to purchase a home with a down payment of less than 20% while still qualifying for a home loan.
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Brittney Meredith-Miller
Brittney Meredith-Miller is assistant editor of PropertyCasualty360.com. She can be reached at [email protected].
