When Is It Right to Have Mortgage Insurance?
Deciding whether to buy mortgage insurance or not depends on your finances and capacity to pay a down payment. However, PMI is often required in most conventional loans if your down payment is less than 20%. FHA loans, which are designed to have very low down payments, always require mortgage insurance. For most homebuyers, especially first-time homebuyers, mortgage insurance will likely be unavoidable, at least at the outset of a loan.
Borrowers can also consider mortgage protection insurance when planning their mortgage payments. Mortgage protection insurance typically covers your loan payments in the event of disability, unemployment, or death. Depending on your health and career circumstances, it may be beneficial to purchase mortgage protection insurance to mitigate the risk that you will be unable to make your mortgage payments in the event of an accident or job loss.