Private mortgage insurance – also called mortgage guaranty insurance, mortgage insurance, or simply “MI” – enables borrowers to buy a house with only a modest down payment.

This is because MI protects lenders against the increased risk of borrower default related to high loan-to-value (LTV) mortgages. MI does this by spreading the risk – dispersing it across a large, geographic range. In short, mortgage insurance lets you lend more money to more people and sell those loans more easily in secondary markets.

It is most commonly used by lenders for loans towards which the borrower makes a down payment of less than 20%. These loans are generally considered more risky because the borrower has only minimal equity in the property and, therefore, is considered more likely to default. MI gives the lender added security to offset the risk of loans with smaller down payments. The borrower pays the mortgage insurance premiums, which are included in the monthly mortgage payments.

Compared with other forms of financing high-LTV loans, MI means lower payments for fewer years, putting your customers in a better long-term financial position. And, now that it’s tax-deductible and cancelable, MI offers more predictability, more flexibility, more loan-to-value options, more refund possibilities, and more potential savings than any other alternative to a 20% down payment.

With mortgage insurance, you get a plan that suits your borrowers, no matter what their housing plans or financial situation may be! Also, with mortgage insurance, lenders know that loans with low down payments are covered in case of borrower default. That means your customers can get the home they want, with as little as zero down. Plus, new homeowners can reasonably count on an equity line of credit later for home improvement, unexpected expenses, education, or other purchases. A piggyback second mortgage can jeopardize that possibility.

Build a relationship on a solid product that maximizes home-buying dollars. United Guaranty offers coverage for special loan programs and targeted customer bases, Internet solutions, business-to-business options, and training and marketing support for lenders of all sizes.