# What is mortgage insurance? **URL:** \ **Category:** Insurance\ **Created:** [September 18, 2020, 12:37am UTC](https://howtodiscuss.com/t/what-is-mortgage-insurance/15964 "2020-09-18T00:37:37Z")\ **Posts on this page:** 1\ **Showing post:** 3
**Author:** ![Obomaxwell](https://howtodiscuss.com/user_avatar/howtodiscuss.com/obomaxwell/32/3522_2.png) [@Obomaxwell](https://howtodiscuss.com/u/Obomaxwell)\ **Post date:** [September 21, 2020, 9:48pm UTC](https://howtodiscuss.com/t/what-is-mortgage-insurance/15964/3 "2020-09-21T21:48:21Z")
Before buying an automobile on a complete loan there are certain things you should consider, things like; what if I got involved in an accident and this automobile got destroyed, will I be able to pay the dealer his money?, What if I failed to pay the dealer his money?. To solve this problem of uncertainty, you need mortgage insurance. ## **what is mortgage insurance** Mortgage insurance is the portion of your monthly loan payment that goes to the lender to protect them in the event of a default on the loan. Mortgage insurance doesn’t protect you in anyway, it protects the lender in case you stop making your loan payments . for some reasons. It ensures that your lender gets paid. It protects the lender’s loan. _Summary Mortgage insurance is the portion of your monthly loan payment that goes to the lender to protect them in the event of a default on the loan._ ## **Why mortgage insurance** The reason why lenders . wants mortgage insurance is to ensure that they get their loan back in case something happened and you couldn’t make the payment. ## **What are the modalities for mortgage insurance** How much you pay monthly on mortgage insurance is dependent on your premium . _Your premium is the probability of something going wrong. The higher this probability (premium) the higher the percentage will pay monthly or annually and if you have a high credit . the percentage [How to Calculate Percentage](https://howtodiscuss.com/t/how-to-calculate-percentage/83). you’ll pay monthly I likely to be higher_ _Summary How much you pay monthly on mortgage insurance is dependent on your premium._ ## **Types of mortgage insurance** 1. conventional loan 2. FHA loan 3)VA loan . ### **Conventional loan** This is private mortgage insurance . ( PMI) In conventional loan mortgage insurance, if you put down 20% on the loan then you don’t have to worry about mortgage insurance anymore, but you put down anything less then you’re going to have mortgage . insurance. Here the lesser the amount you put down on the loan the higher the amount you are going to have to . pay on the mortgage insurance. For example someone who put down 5% of his loan will have a higher mortgage than someone who put down 10% or 15% . _Summary In conventional loan, the less the amount you put down the higher the amount you’ll have to pay on mortgage._ ### **VA loan** This is government mortgage . insurance. In this type of mortgage insurance [What is mortgage insurance?](https://howtodiscuss.com/t/what-is-mortgage-insurance/15964), you’re required to pay just one time upfront fee after that you don’t have to be making any monthly payment on the mortgage again. ### **FHA loan** This is also a government . mortgage insurance. In this type of mortgage insurance, you’re required to pay for the mortgage . insurance [What is life insurance? A Complete Guide For Beginners](https://howtodiscuss.com/t/what-is-life-insurance/15960). for the whole duration of the loan. For example, if you have a loan for 5yrs FHA stays with you for 5yrs, the only way to get rid of it is to get rid of the loan . ### **Frequently asked questions** **Why do lenders insist on getting mortgage?** Lenders insist on you getting mortgage insurance because they don’t want to risk loosing their money in case something happens and you couldn’t make the loan payment. **What is my insurance premium** Your insurance premium is the probability of something going wrong, the higher this probability, the higher the amount you’ll pay with your insurance company. ### **conclusion** Mortgage insurance is a portion of your monthly loan payment that goes to the lender to protect them in the event of a default on the loan. Mortgage insurance doesn’t cover you in anyway, it covers the lender in case you couldn’t make the loan payment for any reason. ### Related articles #### [What is insurance?](https://howtodiscuss.com/t/what-is-insurance/20026). #### [How Does Life Insurance Work?](https://howtodiscuss.com/t/how-does-life-insurance-work/27515). #### [What is Buildings Insurance?](https://howtodiscuss.com/t/what-is-buildings-insurance/27446). #### [Pet Insurance](https://howtodiscuss.com/t/pet-insurance/19670). #### [Car insurance policy for new drivers](https://howtodiscuss.com/t/car-insurance-policy-for-new-drivers/27483). --- _[View the full topic](https://howtodiscuss.com/t/what-is-mortgage-insurance/15964)._