In real estate finance, mortgage insurance is coverage designed to protect a mortgage lender against losses resulting from borrower default. By reducing the lender’s risk, mortgage insurance allows lenders to approve loans with a higher loan to value ratio than would otherwise be acceptable.
Mortgage insurance may be issued by independent private mortgage insurance companies or provided through government programs. In the United States, the federal government offers this type of insurance through agencies such as the Federal Housing Administration and the Department of Veterans Affairs, expanding access to mortgage financing for qualified borrowers.
