Mortgage Insurance Meaning and Definition
In our knowledge base section, we include “what is mortgage insurance”. Insurance is very broad. In this website InvestmentTotal.com will discuss the meaning and definition of mortgage insurance. In our previous topics we already discussed meaning of insurance, it is an income protection or security for financial purposes.
In real estate investing, the word “mortgage” and “insurance” is very popular. The words are being used when selling not just an insurance but dealing with the real estate investors and homeowners.
What is Mortgage?
I opened the encyclopedia and here’s what I found, the meaning of mortgage are as follows;
“A conditional conveyance of land, a house, etc. as a security for a loan.The property remains in the possession of the borrower but may be claimed by the lender if the loan and interest are not paid according to the agreed terms.”
Citations and Reference: The New Lexicon Webster’s Encyclopedic Dictionary of the English Language, Lexicon Publications, Inc., Danbury CT, 1992 ISBN: 0-7172-4576-4 p. 651
Image Credit: American Advisors Group on Creative Commons 2.0 via FlickrWhat is Insurance?
“The following sentences or paraphrases are the meaning and definition of insurance;
Insurance is the practice by which an individual secured financial compensation for a specified loss or damaged resulting from risk of any sort, by contract with a company to which he pays regular premiums.”
Citations and Reference: The New Lexicon Webster’s Encyclopedic Dictionary of the English Language, Lexicon Publications, Inc., Danbury CT, 1992 ISBN: 0-7172-4576-4 p. 502
What is Mortgage Insurance?
Thus, the meaning of mortgage insurance is to give compensation to the investors for losses due to a mortgage loan by default. In some countries like USA, UK and Australia, there are types of mortgage insurance policy;
- Australia – Lenders Mortgage Insurance
- United Kingdom – Mortgage Idemnity Guarantee
- United States – Borrower-Paid Private Mortgage Insurance and Lender-Paid Private Mortgage Insurance
Citations and Reference: Wikipedia
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