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This type of insurance
is required by lenders if the amount borrowed is high when compared
to the value of the property. Generally, mortgage insurance is required
when this so-called "loan-to-value ratio" exceeds 80%. The purpose
of the insurance is to protect the lender against nonpayment of
the loan by you, the borrower. If this ratio is reduced over time
because of reductions in your principal balance and increases in
the value of the property, the lender may no longer be require you
to purchase it.
Portions of
this page are reprinted with the permission of CATIC.
The information
you obtain at this site is not, nor is it intended to be legal advice.
You should consult an attorney for individual advice regarding your
own situation.
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