MI. Did you know that Gene Simmons once took out an insurance policy on his tongue?

You can insure just about anything. Including your mortgage. That’s why it’s very common to have Mortgage Insurance, or MI. It’s an insurance policy that protects a lender in the event that the borrower defaults on the loan.

Simple FYI: Once you’ve achieved 20% equity in your home, you may be eligible to cancel your MI (with the exception of FHA loans, which do not allow the removal of MI).

Depending on the type of loan you have, you will pay for mortgage insurance one of two ways:

Private Mortgage Insurance (known as PMI) or

FHA Mortgage Insurance (known as MIP).