Mortgage Default Insurance

Mortgage Default Insurance is a coverage that protects lenders if a borrower fails to repay their mortgage. It is typically required when a homebuyer makes a down payment of less than 20%, reducing the lender's risk. The insurance policy ensures that the lender can recover some or all of their losses if the borrower defaults. This insurance often results in lower down payment requirements for buyers but adds a premium cost to the mortgage. Ultimately, it facilitates homeownership access for those with smaller savings while providing financial security for lenders.