The correct term referring to the insurance that may be required in addition to regular mortgage payments for conventional loans is private mortgage insurance (PMI). PMI is typically required by lenders when a borrower makes a down payment that is less than 20% of the home's purchase price. The purpose of PMI is to protect the lender in case the borrower defaults on the loan. By obtaining PMI, the lender mitigates their risk, which allows them to provide loans to borrowers who may not have a substantial down payment saved up.
Homeowner's insurance is essential for protecting the homeowner’s property and belongings but is not specifically related to mortgage requirements. VA insurance pertains to loans backed by the Department of Veterans Affairs, which serves a different group of borrowers and involves its own insurance guarantees. FHA insurance relates to loans insured by the Federal Housing Administration, typically aimed at helping lower-income borrowers. While these insurances play vital roles in their respective contexts, they do not specifically address the need for insurance in conventional loans where PMI is mandated when borrowers have lower down payments.