We should only pay the pecentage of the interest of what we own. With the interest rates the mortgage companys charge they make double and sometimes triple what we buy the house for.
2006-09-14 04:35:43 · 13 answers · asked by Savriti 2 in Business & Finance ➔ Insurance
Wow...
You purchase insurance for yourself, and the bank. If there was a flood, fire, any other covered loss adn you are unable to live in your home, the bank still requires you to make your montly payment.
By purchasing insurance you are protecting your own assets, not just for the bank.
Most people don' t realize that the insurance company will not only rebuild your home up to the limits on your declaration page, but most of them pay for your "additional cost of living expenses" for up to 12 months, granted that time frame varies based on the carrier but that is standard.
Moral of the story, you are protecting yourself not the bank. You never know what might happen, in the world today.
If you decide to not purchase the insurance your really hurting yourself more than the bank or anyone else.
2006-09-14 08:20:25 · answer #1 · answered by sasifrass13 2 · 0⤊ 0⤋
You Own the house. Any of the future appreciation is yours.
The Mortgage is a lien against the house. They can take ownership if you don't make the mortgage payments.
You are responsible for protecting the property you own and you were only give a mortgage because you promised to maintain the protection of that property.
If you don't like home ownership, Sell the house and Rent an apartment or house. Nobody is forcing you to be a homeowner. You have a choice.
2006-09-14 04:46:56 · answer #2 · answered by Joe the Expert 2 · 1⤊ 0⤋
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2016-09-30 23:00:09 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Wrong....YOU own the house...the bank owns the loan and has a lien against the house.
The bank own a home mortgage and not the home.
As part of their contract with you, you are obligated to maintain HO insurance to protect the collateral and their lien.
Even if you sell the house, the bank's lien would have to be satisfied or waived befreo ownership can transfer.
2006-09-14 08:45:17 · answer #4 · answered by fryeguy93 2 · 0⤊ 0⤋
This is one of the ways banks make money. What you can do is get a piggyback loan. Put 5% down, get an 80% mortgage (usually fixed rate), and a 15% equity line (usually variable rate). I got the two loans through the same lender and was able to avoid PMI.
2006-09-14 04:39:08 · answer #5 · answered by Jordan K 3 · 0⤊ 1⤋
you pay for insurance because you are insuring your interest in the home. if you have no insurance and the home is destoyed you will have nothing coming to you and therefore just lost all the money you paid into owning the home. also, if something happens to the home (wind damage, a tree falls on it, lightening hits, etc) the insurance will pay to fix it, minus your deductible: same as car insurance. a homeowners policy also insures your property in the home and any other structures on the property. i am an insurance agent, and have seen many lives destroyed because they did not carry insurance, or enough insurance...don't be one of them!!!
2006-09-14 08:22:16 · answer #6 · answered by Queen B 6 · 0⤊ 0⤋
Because you still have to pay the bank if it burns down. The bank may hold the mortgage but unfortunately you still hold the responsibility.
2006-09-14 04:38:49 · answer #7 · answered by jusme 5 · 0⤊ 0⤋
You're at the mercy of the lenders wishes when it's their money. If you don't like their policies, including insurance, don't use their money: pay cash 100% down 0% a month. That's what I did.
2006-09-14 04:44:33 · answer #8 · answered by waplambadoobatawhopbamboo 5 · 0⤊ 1⤋
Because if the house burns down, the bank can still get their money.
2006-09-14 04:38:05 · answer #9 · answered by kathy p 3 · 0⤊ 0⤋
You are using the property and you would be the one to cause any damage just by living there. it protects the investor (bank) and by buyer (you) both.
2006-09-14 04:43:55 · answer #10 · answered by Starla_C 7 · 0⤊ 0⤋