What is mortgage insurance?

Mortgage insurance protects the lender, not the buyer, if you default. It is usually required when your down payment is below 20% on conventional loans or on most FHA loans.

When is mortgage insurance required?

Typically when you put less than 20% down on a conventional loan, or with most FHA loans regardless of down payment.

How much does it cost?

It varies based on loan type, credit score, and down payment. It is usually a monthly cost added to your payment.

Can it be removed?

For conventional loans, yes, once you reach enough equity. FHA loans often require refinancing to remove it.

Does it affect buying power?

Yes. It increases your monthly payment and reduces what you can afford.

Is it always a bad thing?

No. It allows buyers to enter the market sooner with less cash.