Mortgage insurance protects the lender against financial loss in the event that a mortgagor stops making the monthly mortgage payments. It is required on mortgage programs where the loan to value is greater than 80% of the sales price or appraised value, whichever is lower. Another option is Lender Paid Mortgage Insurance (LPMI). This option, the lender will pay the mortgage insurance, however it is offset by a higher interest rate charged to the borrower.