Mortgage insurance is a policy that covers the lender in the case of loss. For some borrowers, the FHA (Federal Housing Authority) provides mortgage insurance. For other borrowers, a policy from a private mortgage insurer (PMI) may a better option.
PMI companies usually have larger down-payment requirements and more-stringent qualification guidelines than the FHA. They may also cover loans that are large than the FHA’s limits. Premiums from these lenders are often lower than FHA premiums, though.
Most lenders will have guidelines and information about PMI options, for situations where mortgage insurance will be required. Ask your lender if PMI is an option for your situation.