 TITLE: Do You Really Need Mortgage Insurance? CONTENT: What Does Mortgage Insurance Cover?\n-----------------------------------\nMortgage lenders expect a buyer to provide at least 20% of a home's purchase price as a down payment. Such a sum can be prohibitive, especially when your income is limited, or if you're a first-time homebuyer and don't have existing home equity available. For example, 20% of a $200,000 mortgage would be $40,000, a cost that's likely to overwhelm many homebuyers. It's important for lenders, though, as it protects their interests in the event of default and foreclosure. They'll at least have the funds that you initially put down when you bought the home.\nThe primary purpose of mortgage insurance is to reduce a lender's risk in lending you money. With that coverage, your insurer will step in to pay the lender if you do not make your payments as agreed. Mortgage insurance can help you buy a home without needing to provide a substantial down payment because it gives the lender confidence the loan will be repaid if you renege. END