Home Owners Insurance VS. Mortgage Insurance

Home Owners Insurance, or HOI, and Mortgage Insurance are 2 separate topics.

Home Owners Insurance (HOI) is the insurance required to protect the home being purchased. This consists of Hazard, Fire, Wind, Flood, Liability, Hurricane, Sink hole, etc... HOI is paid for one a yearly basis. The first year of coverage is paid upfront as part of the closing costs.

Mortgage insurance is insurance that protects the lender against the borrower defaulting on the loan. This is only required when your down payment is less than 20% of the purchase price. Some mortgage insurance products can be removed from the loan at a certain point in the repayment process.