What is mortgage insurance and when is it required?
Mortgage insurance is also known as MI. This insurance coverage is required when you finance a mortgage greater than 80% of the property’s value. The mortgage insurance premium is based on various loan characteristics, including, but not limited to, credit score, loan to value, type of loan and amortization. Usually, the premium is included in your monthly payment and one to two months of the premium is collected as a required reserve at closing. MI may be cancelled when your loan balance is falls below 75% to 80% of the property value.