What are the Steps of obtaining Mortgage Insurance?

The process of obtaining mortgage insurance typically involves several steps.


Step 1: 

       Determine the need for mortgage insurance The first step is to determine whether mortgage insurance is required for the loan. If the borrower is making a down payment of less than 20% on a home purchase, mortgage insurance will likely be required. The type of mortgage insurance required will depend on the type of loan and the lender's requirements.

Step 2: 

       Apply for mortgage insurance Once it has been determined that mortgage insurance is required, the borrower will need to apply for the insurance. The lender may assist with this process or the borrower may need to work directly with the mortgage insurance provider.

The application process typically involves providing personal and financial information, such as employment history, income, and credit score. The mortgage insurance provider will use this information to determine the cost of the insurance and whether the borrower meets their eligibility requirements.

Step 3: 

       Receive approval for mortgage insurance After the application has been submitted, the mortgage insurance provider will review the information provided by the borrower and make a decision on whether to approve the insurance. If the borrower is approved, the mortgage insurance provider will provide a mortgage insurance policy that outlines the terms and conditions of the insurance.

Step 4: 

       Pay for mortgage insurance The cost of mortgage insurance varies depending on the type of insurance and the size of the down payment. Private mortgage insurance (PMI) is typically paid monthly and is added to the borrower's mortgage payment. Government mortgage insurance, such as FHA mortgage insurance, is usually paid as an upfront premium at the time of closing and an annual premium that is added to the borrower's mortgage payment.

Step 5: 

        Maintain mortgage insurance Mortgage insurance must be maintained for the life of the loan in the case of government mortgage insurance, or until the borrower reaches a certain level of equity in their home in the case of private mortgage insurance.


For PMI, the borrower will need to reach a loan-to-value (LTV) ratio of 80% before they can request that the insurance be cancelled. The LTV ratio is the amount of the mortgage loan divided by the appraised value of the property. Once the LTV ratio reaches 78%, the PMI will automatically be cancelled.

For government mortgage insurance, such as FHA mortgage insurance, the insurance must be paid for the life of the loan. If the borrower wants to refinance or sell their home, they may need to obtain new mortgage insurance if they do not meet the equity requirements.

In summary, obtaining mortgage insurance involves determining the need for the insurance, applying for the insurance, receiving approval, paying for the insurance, and maintaining the insurance. The process will vary depending on the type of loan and the lender's requirements, but in general, it is a straightforward process that helps protect lenders from the risk of borrower default.

The Top 5 Big companies of Mortgage Insurance:

The mortgage insurance industry is dominated by a few major players. These companies have significant market share and provide mortgage insurance for a large percentage of the loans that require it. The following are some of the biggest and best players in the mortgage insurance industry:

Genworth Financial 

Genworth Financial is a Fortune 500 company and one of the largest providers of mortgage insurance in the United States. The company provides both private mortgage insurance and government mortgage insurance, and has a presence in Canada and Australia as well. Genworth Financial has been providing mortgage insurance for over 30 years and is considered a reliable and experienced provider.


United Guaranty 

United Guaranty is a subsidiary of the global insurance company, AIG. The company provides private mortgage insurance and has a strong reputation for underwriting and risk management. United Guaranty has been in business for over 50 years and has a significant market share in the United States.


MGIC Investment Corp.

MGIC Investment Corp. is one of the largest private mortgage insurance providers in the United States. The company has been in business for over 60 years and is known for its innovative underwriting practices and strong risk management. MGIC Investment Corp. has a significant market share and is considered a reliable provider of mortgage insurance.


Radian Group Inc. 

Radian Group Inc. is a global provider of mortgage insurance, with a strong presence in the United States. The company provides both private mortgage insurance and government mortgage insurance, and is known for its innovative products and risk management practices. Radian Group Inc. has been in business for over 40 years and has a significant market share in the mortgage insurance industry.


Essent Guaranty, Inc. 

Essent Guaranty, Inc. is a newer entrant in the mortgage insurance industry, having been in business since 2008. Despite its relatively short history, the company has quickly become a major player in the market and has a strong reputation for underwriting and risk management. Essent Guaranty, Inc. provides private mortgage insurance and has a significant market share in the United States.

In conclusion, these are some of the biggest and best players in the mortgage insurance industry. Each of these companies has a significant market share and is known for its underwriting expertise, risk management practices, and innovative products. Borrowers can trust these companies to provide reliable and effective mortgage insurance coverage.