YOU ASK:

Is mortgage default insurance mandatory or optional?

WE ANSWER:

The lender will require mortgage default insurance coverage if you pay a down payment of less than 20% of the value of the property.

It's optional when you already have 20% equity on the property. However, you should try to get rid of mortgage default insurance payments when you are able to since it only poses an additional expense for you.

The mortgage default insurance is intended to protect the interests of your bank or lending institution, even as you are the one who pays for it. The lending institution would prefer for mortgage insurance to continue since they sometimes earn commissions or referral fees from it. You will have to take initiative to have that coverage removed.

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