Kansas Real Estate Salesperson Practice Exam

In a mortgage agreement, the party responsible for paying mortgage insurance premiums is typically the mortgagor, which refers to the borrower who takes out the loan. Mortgage insurance is generally required when the borrower has a down payment of less than 20% of the home's purchase price. This insurance protects the lender in the event the borrower defaults on the loan.

The mortgagor pays the mortgage insurance premiums as part of their overall monthly mortgage payment. This obligation arises because the insurance is designed to mitigate the lender's risk associated with lending a larger portion of the property's value.

In contrast, other parties involved, such as the lender, seller, or co-borrower, do not bear the responsibility for mortgage insurance premiums in the standard context of a mortgage agreement. The lender receives the insurance benefit in case of default, the seller typically does not pay mortgage insurance as their involvement generally ends with the sale of the property, and while a co-borrower shares responsibility for the mortgage with the primary borrower, it is still the mortgagor's role to ensure that the premium payments are made.