Why do I need mortgage insurance?

Private mortgage insurance is an insurance policy designed to protect the lender in case you do not pay back your mortgage loan. If you are unable to make a down payment of at least 20%, you will typically be required to take out private mortgage insurance.
How are mortgage insurance premiums paid?

Mortgage insurance premiums are collected in a variety of ways:

1. As a monthly payment charged to the borrower
2. As a lump sum payable by the borrower at closing
3. Wrapped into the amount of the mortgage loan, or
4. Wrapped into the interest rate of the home loan