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An insured mortgage is a mortgage with an insurance policy that insures the lender against the default of the borrower. In the US, the insured mortgage is generally for residential property. In lieu of having an insured mortgage, the lender will usually demand a more exacting appraisal, a higher LTV, and other measures for these properties. The insured mortgage may be insured by a government agency, such as the FHA or VA, or a private sector entity, such as Fannie Mae or Freddie Mac. Often the insured mortgage is combined with several others that are very similar to issue a mortgage backed security. Before the advent of the insured mortgage, many households were unable to obtain home financing. Typically, the borrower pays the premium along with the monthly payment for the insured mortgage. |
