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I've not heard of mortgage insurance. Don't lenders just give higher interest rates to riskier borrowers?

• altcognito 11y ago
  No, for reasons which relate to overconfidence of bankers and their ability to rate credit: https://en.wikipedia.org/wiki/Mortgage_insurance#History https://en.wikipedia.org/wiki/Mortgage_insurance#History
• sjg007 11y ago
  Both apply. Rate is typically credit based but also depends on the loan amount. PMI is for <20% down except in special cases.
• yourapostasy 11y ago
  If you are a higher-than-average risk borrower and put down less than 20%, you get hit with both a higher interest rate than average risk borrowers receive, and you must pay mortgage insurance until you reach 20% equity. To add insult to injury, it is extremely common for the mortgage insurance companies and the mortgage servicing companies (not always the same) to simply keep charging borrowers the mortgage insurance fee even after the borrower reaches 20% equity.
  • extra88 11y ago
    Mortgage insurance payments end at 20% equity but you must ask for it to end. PMI automatically ends when you reach 22%. It also automatically ends if you are halfway through your mortgage schedule (e.g. 15 years for a 30 year mortgage), regardless of how much equity you have in the home. http://www.consumerfinance.gov/askcfpb/202/when-can-i-remove-private-mortgage-pmi-insurance-from-my-loan.html http://www.consumerfinance.gov/askcfpb/202/when-can-i-remove...