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Lenders mortgage insurance is a type of insurance that is designed to guarantee the mortgage for the lender. This type of mortgage is paid for by the borrower, but it actually benefits the lender. Here are a few things to consider about lenders mortgage insurance.
Lenders Mortgage Insurance
Lenders mortgage insurance is also referred to as private mortgage insurance in many cases. When an individual borrows an amount of money in a mortgage that is greater than 80 percent of the value of the property, he is going to be required to purchase private mortgage insurance in most cases. This is going to add a certain amount of money to the monthly mortgage payment for the individual.
What It Does
This type of insurance coverage is a protection for the lender. If the individual defaults on his mortgage, the lender's mortgage insurance company is going to step in and reimburse the lender for the amount of money that it lost. Borrowers tend not to like lenders mortgage insurance because they are not actually receiving any type of benefit from it. They are paying for something that is going to help their lenders guarantee the loans.
