Mortgage Insurance

Private mortgage insurance (PrivateMI) is insurance that protects a lender or investor against loss if a borrower stops making mortgage payments. It makes it possible for you to buy a house with as little as a 3-to-5 percent down payment, helping you buy a home sooner than you otherwise could. Studies show that homeowners with less than 20 percent invested in a home are more likely to default, making low down payment mortgages more risky for lenders and investors. That's why lenders and investors generally require mortgage insurance for loans with down payments of less than 20 percent.

MICA: The Mortgage Insurance Companies of America (MICA) is the trade association representing the private mortgage insurance industry. Its members help loan originators and investors make funds available to home buyers with as little as 3-to-5 percent down — and even less for qualified borrowers — by protecting these institutions from a major portion of the financial risk of default.