Mortgage insurance helps you to get a mortgage without having to make a substantial down payment. By paying a mortgage insurance premium, you can purchase a new home with less than 20% down. Mortgage insurance protects the mortgage investor if the account becomes past due.
The most common types of mortgage insurance are private mortgage insurance (PMI) and insurance through the Federal Housing Administration (FHA), called a mortgage insurance premium (MIP).
If you are required to carry mortgage insurance, the insurance may be canceled when the equity in your home reaches a certain percentage.