What Does Mortgage Guarantee Insurance Mean?
Mortgage guarantee insurance is a policy meant to protect a mortgage lender in the event that a borrower is no longer able to repay their loan or meet other contractual stipulations regarding the loan.
Payment for this insurance may be added to the loan or it might be purchased from an insurer separate from the lender.
It is also called mortgage insurance.
Insuranceopedia Explains Mortgage Guarantee Insurance
In the US, lending institutions like banks might require a person who needs financing for a home but whose down payment is less than 20% of the property value to buy mortgage guarantee insurance.
If payments for the loan have exceeded 20%, the borrower can approach the bank and request that the insurance be cancelled.
The lender can include the insurance as part of the loan and roll the cost of it into the loan payments, or the borrower can purchase a policy directly from an insurance company.