Mortgage insurance is insurance for the lender. Borrowers pay it, but it is for the lender if you default on the loan. Conventional loans require mortgage insurance if you put down less than 20% on the home. You can cancel it once you pay your balance down to 80% of the home’s value.
Government loans, including FHA and USDA loans, charge mortgage insurance for the life of the loan, but at a rate lower than conventional loans. Mortgage insurance helps borrowers secure a loan when they don’t have great credit or don’t have much money to put down on the home.