Simply insurance that protects the lender if in any case the homebuyer does not make their respective mortgage payments is called as mortgage insurance. It can be defined as a financial guaranty that protects the lenders against the loss. In any case if the borrower is found to be defaulted and the lender takes the title of the property then the mortgage insurer reduces the loss to the lender. More over in case of mortgage insurance, the insurer haves some risk by lending money.The mortgage insurance is a special type of insurance policy and is gaining huge popularity in the Indian mortgage industry.
The mortgage insurance is a special type of insurance policy that guarantees repayment of a mortgage loan in the event of death or disability of the person who borrowed the mortgage. The tenure of payment of such mortgage insurance is usually of 12 months and in some cases it goes higher up. Furthermore, the lender can also protect his loaned capital through these special type of insurance instrument.