Private mortgage insurance (MI) plays an essential role in today’s lending environment, yet many long-held misconceptions may still shape how it’s perceived. Whether you’re a loan officer helping borrowers understand their loan options, an underwriter evaluating risk, or a sales manager focused on volume and service, understanding the facts about MI can help you make more confident, informed decisions.

Let’s look at five of the most common mortgage insurance myths and see how they stack up against today’s trends.

Myth #1: All Mortgage Insurance Providers Are Basically the Same

It might seem that way, especially when MI companies may deliver similar quotes for a given loan, but the true difference may come down to the experience lenders have every day. That’s where service, responsiveness, and reliability matter most.

The reality: Not all MI providers deliver the same level of support. When the pricing differential is narrow for a given loan, exceptional customer service frequently becomes the tiebreaker, helping lenders keep loans moving, resolve issues quickly, and maintain borrower confidence. The Radian Guaranty team is known for being accessible, proactive, and easy to work with, backed by tools like MI Online, MI Rate Finder, and MI Origination resources that help make each step more straightforward and predictable.

Myth #2: Mortgage Insurance Only Benefits the Lender

While MI does protect lenders from financial losses associated with borrower default, that protection also may help reduce risk and enable a lender to finance houses with smaller down payments. This may benefit qualified borrowers who don’t have a 20% down payment. Mortgage insurance can help open the door to homeownership by making it possible for borrowers to qualify with smaller down payments. This means many families can purchase a home sooner, rather than waiting years to save, and begin building equity right away. 

The reality: Mortgage insurance can bring value to both sides of the lending relationship. For lenders, mortgage insurance may help reduce exposure to credit risk, and for borrowers, it can open doors to financing choices that might otherwise be unavailable. It’s a tool that can be used to foster opportunity in addition to providing protection.  

Myth #3: Mortgage Insurance Slows Down the Origination Process

This might have been true years ago, when MI required extra paperwork and manual submissions. But today’s mortgage insurance process is digital, automated, and frequently built directly into lenders’ existing workflows.

The reality: Modern MI is designed for speed and simplicity. For example, through Radian Guaranty’s technology integrations with leading loan origination systems, lenders can quote and manage MI directly within their day-to-day process, helping save time and eliminate unnecessary steps. It’s one less thing that can slow origination pipelines. In addition, some MI companies may delegate to qualified lenders the authority to underwrite loans for mortgage insurance. This delegation enables the lender to obtain mortgage insurance coverage on the loan if the lender has underwritten the loan in accordance with eligibility criteria and other requirements of the MI company’s delegated underwriting program, thus potentially eliminating the need for an independent MI company underwrite.  

Myth #4: Explaining Mortgage Insurance to Borrowers Is Uncomfortable and Complicated

Explaining MI doesn’t have to be uncomfortable or complicated. Borrowers may benefit from understanding both the costs and the potential advantages: mortgage insurance can make it possible to buy a home with a smaller down payment, while also offering lenders added assurance.

The reality: Clear, borrower-friendly language goes a long way. Radian Guaranty’s training and tutorial library offers easy-to-follow guidance for loan officers and processors, helping teams talk about MI confidently and in a way that supports a positive borrower experience.

Myth #5: Mortgage Insurance Makes Loans More Expensive for Borrowers 

Yes, MI adds a cost, but it also may enable a borrower to qualify for a loan sooner than they might have otherwise when the borrower does not have sufficient down payment to meet loan to value eligibility requirements. So, the cost of MI may be outweighed by the ability to obtain a loan sooner, start building equity earlier, and avoid prolonged exposure to rising home prices.

The reality: MI can be flexible. With options like monthly, single-premium, or split-premium coverage, lenders can tailor solutions that fit each borrower’s budget and goals. Radian Guaranty provides the flexibility and transparency to structure loans that balance affordability and long-term value.

Bringing It All Together

Private mortgage insurance continues to evolve, and so do the opportunities it creates for lenders and borrowers. Dispelling common myths helps keep the conversation focused on what matters most: confident, responsible lending that opens more doors to homeownership. When lenders and borrowers understand the facts about MI, everyone wins, with simpler workflows, faster closings, and more paths to homeownership.

© 2026 Radian Group Inc. All Rights Reserved.  550 East Swedesford Road, Suite 350, Wayne, PA 19087. “Radian” is a brand of Radian Group Inc., including its licensed insurance affiliates. Mortgage insurance is provided and underwritten by Radian Guaranty Inc., a wholly owned subsidiary of Radian Group Inc. with home offices at 550 East Swedesford Road, Suite 350, Wayne, PA 19087. Radian Guaranty Inc. is a monoline mortgage insurance company licensed to write business in all 50 states, the District of Columbia and Guam.  This communication is provided for use by real estate or mortgage professionals only and is not intended for distribution to consumers or other third parties.  This does not constitute an advertisement as defined by Section 1026.2(a)(2) of Regulation Z.