What is Mortgage Insurance Premium?
Mortgage insurance premium is a monthly or annual fee that protects the lender against loss if a borrower defaults on a loan with a low down payment.
Mortgage insurance premium is a charge paid by the borrower to protect the lender in case of default, typically required when the down payment is less than twenty percent of the purchase price. It applies to conventional loans as private mortgage insurance and to government-backed loans as mortgage insurance premium. Borrowers encounter it as part of their monthly payment or as an upfront cost. Watch for the annual cost, cancellation rules for conventional loans, and whether it can be financed. For FHA loans, mortgage insurance premium may last the life of the loan in some cases.
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