What is mortgage insurance (otherwise known as MI, PMI, BPMI, LPMI, or FHA/MIP)?
Mortgage insurance protects the mortgage lender against loss incurred if a borrower defaults. The different terms used are MI or PMI (non-governmental private mortgage insurance issued by independent mortgage insurance companies), or FHA/MIP (mortgage insurance issued by the Federal Housing Administration). Also, you may see the terms BPMI (Borrower Paid Mortgage Insurance) or LPMI (Lender Paid Mortgage Insurance), which are dependent on the type of mortgage and the rates and terms offered.
