What exactly does Private Mortgage Insurance cover?

Question

And for how long??????/

Answer 1

Private mortgage insurance, covers THE BANK, if they have to foreclose on your house, and end up selling your house at auction after foreclosure, for less than the balance on your loan.

Then they STILL can sue you for the difference!  And you'll still owe it!

You have it until you have 20% equity in your home.

It's something YOU buy, but you'll NEVER benefit from it.  Except being able to have a mortgage.

Answer 2

It covers the lender in the event that the borrower defaults.  It does nothing for the borrower.  Lenders often require it on no-down or low-down loans.