Mortgage Insurance
Direct definition
Insurance that protects the lender if you default; often required when LTV is above 80%.
Written by the Vabasso Mortgage Editorial Team · Reviewed against agency and federal sources · Read our editorial policy for how we research and review mortgage content
Plain-English explanation
Conventional loans use PMI, FHA uses MIP, and VA uses a funding fee instead. Rules for removal, cost, and structure vary.
Why it matters
MI adds to your monthly payment and can be avoided or removed under specific conditions.
Where you may see it
- Loan Estimate
- Closing Disclosure
- Mortgage statement
- Escrow analysis
A real-world example
A conventional loan at 95% LTV requires PMI; you can request cancellation once LTV drops to 80%.
Educational and illustrative only
A common misunderstanding
Mortgage insurance doesn't protect the borrower or pay off the loan if they can't make payments — it protects the lender against loss.
Ask Vabasso AI
This glossary provides general educational information. Mortgage terminology, qualification methods, forms, timelines, fees, program rules, and legal meanings may vary by lender, investor, loan program, property, occupancy, state, and transaction. Definitions do not represent loan approval, legal advice, tax advice, or a commitment to lend.
- Author
- Vabasso Mortgage Editorial Team
- Reviewed by
- Vabasso Mortgage Licensed Advisory Team
- Last reviewed
- July 30, 2026