Mortgage insurance covers homeowners who suspend their mortgage payments for a year or even more. This insurance protects mortgage lenders providing home loans, as a result more homebuyers who don’t have enough money for a large down payment can purchase a house. Mortgage insurance makes such agreements less risky, so the borrower can make low down payment.
The main idea of this insurance is to protect you and your lender in case you have no ability to cover the loan. That is why it’s better for you to terminate mortgage insurance, once you have covered 20 percent of the loan. But before making such step you need to revise your financial possibilities and future solvency to be able to continue payments.
Keep in mind that for most home-buyers mortgage insurance is necessary. But remember to cancel it when you rich financial stability.
Besides mortgage insurance, you might want to learn more about home insurance options.