While Mortgage Insurance and Home Insurance are Two Very Different Types of Insurance, They Share a Few Things in Common. Both Kinds of Coverage Help Protect a Mortgage Lender’s Financial Investment in a Home.
As your local insurance professional, Morse, of course, is here to help you understand the difference between mortgage insurance and home insurance, how each type of insurance works, and why your lender may require you to have both before you close on a new home.
What is mortgage insurance?
Mortgage insurance is a way for a lender to minimize the financial risk they are taking on when providing a home loan to you. If you fall behind on your mortgage payments or completely stop making payments, mortgage insurance pays out to the lender a portion of the original loan principal so they can make up some of their losses.