mortgage guaranty insurance

Mortgage guaranty insurance, also known as mortgage insurance, protects lenders if a borrower defaults on their loan. When a homebuyer makes a down payment of less than 20%, lenders often require this insurance to reduce their risk. If the borrower fails to repay the loan, the insurance company covers a portion of the lender’s losses. The borrower pays for this insurance through monthly premiums or a one-time upfront fee. It enables more people to qualify for home loans with smaller down payments, making homeownership more accessible while safeguarding lenders’ investments.