Saw Suze Orman promoting it so wondering what the opinions were about it. Seems like a decent deal but I'm not sure.
2006-06-19 16:30:46 · 6 answers · asked by Jesse 2 in Business & Finance ➔ Renting & Real Estate
Mortgage insurance can mean several different types of insurance.
1. (a) If you are purchasing a home and are requested to carry mortgage insurance this is an insurance policy that protects the lender if the mortgagee fails to pay his mortgage. It does not insurance the property or the home owner.
(b) a mortgagee can obtain mortgage insurance when purchasing a home to insure the title of the property is clear if any problems arise while the homeowner has the home. This is a one time fee paid when the home is financed. Most homeowners do not get this type of insurance.
2. Mortgage insurance can also be mistaken to mean home owners insurance. Homeowners insurance covers the property up to a certain dollar amount and the homeowner will choose the insurance company.
3. Some people believe that mortgage insurance is insurance that will pay off the remaining debt on a mortgage if the mortgagee dies. Simply put it is nothing more than a life insurance policy that pays off the mortgage. Some lenders offer this coverage, some do not. Alot of times it is cheaper to get a term life insurance policy.
2006-06-19 17:03:30 · answer #1 · answered by netter jean 1 · 5⤊ 0⤋
Most honest lenders will try to avoid it. Based on my experience, the easiest way to do so is by having a 80% first mortgage and a 20% second mortgage. Although the second mortgage (20%) is slightly higher in interest, you end up paying much less than if you were to get the insurance.
2006-06-19 23:50:02 · answer #2 · answered by Home77 1 · 0⤊ 0⤋
Mortgage Insurance is perhaps the biggest scam going. It does not benefit the bank or mortgage company and it does not benefit the buyer. It is useless, meaningless and only benefits the insurance company....and with managed care we know all about that. It is a lose..lose situation.
2006-06-19 23:36:51 · answer #3 · answered by William 1 · 0⤊ 0⤋
Pays off your mortgage in the case of death of one of the holders so the other is not burdened. Some will also pay in the case of job loss, for a short period. Many banks require you to have it until 20% of the mortgage is paid, then you can drop it, but if the cost is low, it is good to keep.
2006-06-19 23:34:34 · answer #4 · answered by psycmikev 6 · 0⤊ 0⤋
It's like any other insurance. If you die or become unable to pay your mortgage due to certain illnesses or accidents...the payments will be made for a certain length of time. It depends on the policy
2006-06-19 23:36:28 · answer #5 · answered by funlady6632@yahoo.com 6 · 0⤊ 0⤋
I am assuming you are talking about MI that protects the lender in case of default. All conforming loans that are above 80% loan to value are required to have it. You can get around having MI by using a sub-prime lender but you will have a higher interest rate. MI does not benefit the borrower at all but protects the lender in case your loan goes into foreclosure.
http://www.lendermark.com
2006-06-20 13:24:59 · answer #6 · answered by lendermark1 2 · 0⤊ 0⤋