Mortgage insurance (MI)
A contract that insures the lender against loss caused by a borrower's default on a government mortgage or conventional mortgage. Most lenders generally require MI for a loan with a loan-to-value (LTV) greater than 80 percent. Mortgage insurance can be issued by a private company or by a government agency such as the Federal Housing Administration (FHA). Depending on the type of mortgage insurance, the insurance may cover either a percentage of or the entire mortgage loan amount.