Mortgage insurance protects lenders against defaults on riskier loans, particularly for those with low or no down payments. Buyers can avoid mortgage insurance by putting down 20% or more. Mortgage insurance primarily benefits lenders, while homeowner’s insurance covers the physical property. Private Mortgage Insurance (PMI) is common for conventional loans, while Mortgage Insurance Premium (MIP) is required for FHA loans. PMI can be canceled once 20% equity is reached, while MIP remains for the life of the loan unless refinanced.