Mortgage insurace is something that I would recommend that buyer’s obtain. There is protection for the lender and there is protection for the buyer….if someone comes along and makes a claim against your property you have insurance as the owner, if you default on your mortgage the lender has protection. It does add to the monthly amount you will pay…this article from the New York Times discusses an option of making a single payment upfront rather than paying for many years until you have enough equity or forever with certain loans.
Private mortgage insurance is the bane of home buyers who can’t put down at least 20 percent. The insurance protects the lender in the event that a borrower defaults on a property with little equity, but it also guarantees a considerably higher monthly mortgage payment.
The single premium can be paid as part of the closing costs or financed into the loan. Many lenders are also using lender credits or premium pricing to pay for the single premium,