A Mortgage Insurance Certificate (MIC) is an official document issued by a private mortgage insurance company to the mortgage lender. It confirms that the lender is protected against financial losses should the borrower default on their home loan. While the borrower pays the Private Mortgage Insurance (PMI) premiums, the MIC is held exclusively by the lender as the policy beneficiary.
Lenders typically require PMI—and the corresponding MIC—when homebuyers make a down payment of less than 20% of the purchase price. This lowers lender risk by offering insurance coverage against default losses.
The MIC contains critical policy information, including the insurer’s name, policy number, loan details, property address, coverage percentage, and premium schedule. This certificate helps the lender verify coverage and make claims if necessary.
Despite being essential to the loan process, borrowers usually never see the MIC document. Instead, borrowers receive disclosures about the cost and terms of PMI, which is distinct from homeowner’s insurance that protects against property damage.
Thanks to the Homeowners Protection Act, borrowers can request cancellation of PMI—and render the MIC void—once their loan-to-value (LTV) ratio reaches 80%. Automatic termination of PMI must occur at 78% LTV, provided the borrower is current on payments. Increasing home value can also accelerate PMI removal upon providing a new appraisal.
For more on PMI and mortgage insurance cancellation, see our detailed articles on Private Mortgage Insurance (PMI) and Mortgage Insurance Cancelation.
Learn more about federal PMI protections under the Homeowners Protection Act at the Consumer Financial Protection Bureau: When can I remove private mortgage insurance (PMI) from my loan?.
