Mortgage insurance is a type of insurance policy that protects your lender in case you default on your loan. There are different types of mortgage insurance policies. Private mortgage insurance (PMI) is one type of policy. You pay PMI when you get a conventional loan, usually if your down payment is less than 20% of the home’s appraised value. Mortgage insurance premium (MIP) is another type of policy. You pay MIP when you get an FHA loan, regardless of the down payment. VA loans have different insurance guidelines.