All About Mortgage Insurance: December 2009

Monday, December 21, 2009

Update Dec. 21 - 2009 All About "Mortgage Insurance" Information By Insurance Experts

Mortgage insurance is defined as a decreasing term life insurance depending to the amortization of the mortgage period while the premium remains the same over that period. You can purchase the mortgage insurance from the bank, trust or life insurance companies.
1. If you purchase your mortgage insurance from the bank or trust
a) No medical exam is required
b) The beneficiary of the policy is the bank or trust
2. if you purchase your mortgage insurance from the life insurance companies
a) medical exam is required for any sum insured over $100,000
b) The beneficiary of the policy is designated by you ( Kyle J. Norton)

All About Private Mortgage Insurance - PMI

By Ron Beauchamp

Making mortgage loans can be a risky business. As with all businesses, lenders are looking for assurance that their investments will be protected. However, it's not always easy to predict which borrowers will default on their mortgages or eventually go into foreclosure. Because of this, lenders require that the borrower pay for Private Mortgage Insurance under certain circumstances.

What Does PMI Do? Private Mortgage Insurance protects lenders in the event that the borrower does not repay the loan. Instead of the lender losing the money, the insurance company will step in and cover the losses. Typically, PMI only covers the difference between the home's value and the remaining balance on the mortgage, as the lender can recoup the remainder through sale of the home.

Who Needs PMI? Typically, lenders will require PMI on loans with a loan-to-value of over 80%. In plain english, if the home is worth $100,000 and the loan is for more than $80,000, the lender will require private mortgage insurance. PMI can be canceled when the borrower no longer owes more than 80% of the home's value.

Why Offer It? It would be much safer for lenders to only accept borrowers that can make a 20% or more down payment, but that would significantly lower the number of individuals that are able to purchase a home. Instead, PMI protects the lenders just as if the borrow had made the full 20% down payment, of course, it is an additional expense to the borrower.

How Much Does It Cost? Although the cost can vary depending on the amount of coverage provided (1-20% of the home's value) and the type of loan it covers, it is typically around $35-$70 per month on a $100,000 mortgage.

Find a great Cupertino Mortgage Loan at LoanPickr.com and get a quote on a California Mortgage Loan.

Article Source: http://EzineArticles.com/?expert=Ron_Beauchamp

Mortgage Life Insurance

By Morgan Halls

Mortgage life insurance is a valuable way to protect your family and provide for them in the unfortunate case you should pass away suddenly and unexpectedly. This type of life insurance is slightly different than traditional life insurance for the single reason being that in the event of your death, your family would not be directly paid any money from this policy. Instead, if you were to pass away, the mortgage life insurance company would send a direct payment to your bank that satisfies any additional money owed on your property. This naturally leads to a good number of questions that must be answered before full understanding of this type of coverage can be gained.

How Does Mortgage Life Insurance Work?

This type of policy works by having your insurance company directly pay off the balance of your mortgage in the event of you passing away. Unlike traditional life insurance, your family is not awarded any direct funds, however, once the mortgage on any property is paid off by the insurance company the beneficiary of that property will inherent it with full ownership; just for the purposes of clarification, once the mortgage insurance company pays off the mortgage on any given property, they do not own that property at all, instead, full ownership is given to the individual who that property was left to in the will or through other arrangements. This is a substantial type of policy as it essentially ensures whoever your property is passed along to will assume ownership of that property without having to make payments on any sort of mortgage or loan.

The Best Mortgage Life Insurance Policy

The best policy of this type is one that comes from a legitimate company that can be found by browsing through your favorite Internet search engine or even your phone book. Typically you are eligible to apply for this type of policy at any time during your time as a home owner but it may be offered to you in some way, shape or form at your closing. One of the most helpful tips to remember is that if at any point you should refinance, take another mortgage out or switch your mortgage to another lender, you must reapply for an entirely new mortgage insurance policy as they are only able to insure existing mortgage policies. To further go into detail, this type of mortgage insurance applies to individual mortgages only and must be reapplied for if you change your mortgage at any given time. Getting mortgage life insurance quotes is the gateway for getting started on this coverage and is a fairly easy process; if you are an existing home owner or strongly considering purchasing a new home, this is one type of long term financial planning you do not want to avoid dealing with or taking into consideration as it can by defining way to provide for your family should tragedy strike.

It can be difficult when it comes to deciding on the best ways to safeguard your home and plan for a sound future. Mortgage Life Insurance is one of the best ways to construct a solid long term financial plan for your investments as well as your family.

Gaining a good knowledge about Mortgage Life Insurance is one of the most recommended ways to tackle the problem and is the first step towards finding the policy that is right for you.

Article Source: http://EzineArticles.com/?expert=Morgan_Halls

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Tuesday, December 1, 2009

Update Dec. 01 - 2009 All About "Mortgage Insurance" Information By Insurance Experts

Some Facts About Mortgage Insurance

By Frank Rodriguez

Too many home purchasers look at their mortgage insurance as either something they have to get or don't need. As a result, many have paid a high price for their lack of understanding. When hit by the recent economic crisis, they were unprepared. Those who were prepared were glad they were.

Mortgage insurance (MI) is sometimes referred to as Lenders Mortgage Insurance because it is part of the home loan package and because it is designed for the protection of the lender should the borrower default on their loan. Private Mortgage Insurance has slightly different connotations, but is also synonymous with MI.

You, the borrower, is the one who pays for your MI. Often you cannot have a home loan approved unless you take out this insurance as part of your package. Usually this is the case if you are unable to pay as much as twenty percent of the price of your home as a down payment.

It is all too common for home loan applicants to settle for the minimum Lender's Mortgage Insurance. So grateful to have been offered a loan at all, they may not question this insurance and see if something that protects them in case of a loss income is available as well. There is such a thing and it is called Job Loss Protection

The most likely reason you will have for being unable to repay your home loan is the loss of your job, especially in these tough economic times when you cannot really trust anything anymore.

You may think that job loss homeowners insurance is prohibitively expensive and decide to skip it altogether or put it off until later. If you make it a point to look into it, you will find that some home insurance companies actually throw it in for free as part of their loan package.

Yes, it sounds like a crazy thing for an insurance company to do, but they want you to take out their policy and that is one of the carrots they will dangle in front of you. Your lending institution, on the other hand, may have hidden that fact from you because they assumed that you would take their offer and not explore all the insurance opportunities at your disposal.

Because one part of your insurance is free doesn't mean that it all is free, of course. You need to assess the risks involved and balance them against the costs and make a practical decision. If you cannot afford the most comprehensive coverage, you may have to settle for less. It is more likely, though, that when you shop around, you will come across a deal that is both affordable and all-inclusive.

After you have made the decision about whether or not to get a policy that includes job loss protection, check to see just how much protection it offers. Is there a long period of time you have to wait before your first installment arrives? Is the period of cover worth the extra investment, if there is one? Policies differ, so be sure to read the fine print.

These few facts about mortgage insurance should get you started on the right road to the best deals. Don't settle for your first or second offer. Wait until you find the perfect insurance policy for you.

Though mortgage insurance is not highly praised it actually plays a valuable role in getting people in homes that they would not otherwise be able to buy. It should not be though of as homeowners insurance, however, as this needs to be purchased separately.

Article Source: http://EzineArticles.com/?expert=Frank_Rodriguez

Lenders Mortgage Insurance For Lower Deposits of 5 Percent of the Property Value

By Ignacio A. Sapalo Jr.

In these hard times, not all of us have the capability of saving up 20% to deposit in order to be able to purchase our dream home. This means that it would be very difficult to get a loan from a bank as they often require a 20% deposit before releasing any funds in the first place.

So what is a prospective borrower to do in such a case? Does the borrower necessarily have to save up even more in order to be able to make the purchase? Saving while all the property prices are going up?

In order to avoid such a situation there is another possible way to purchase your dream home without needing to save up 20% of the value of the property. This is by means of Lenders Mortgage Insurance or LMI. With LMI you can save up just 5% of the value of the property you would like to purchase. When you deposit the 5%, you are allowed to take a loan, and pay a fee to the lender to cover the LMI. The fee will depend on the amount borrowed, and the amount you have deposited. The LMI fee may be paid up front, or made in addition to the loan.

Although LMI is not mandatory, it becomes mandatory when the lenders require it. The common practice is to require LMI if you are borrowing more than 80% of the property value. This is in order to protect the lender from possible defaults in repayments. If there is a default in the payment then the property is sold, and if the lender still suffers a loss, then insurance company makes up for the loss.

At first glance this type of insurance protects the lender in the event of default, there are also a number of benefits to first time buyers. The obvious benefits are that it enables these buyers to purchase a home sooner with a smaller deposit. Where prices of homes keep on rising, it is better to get into the market and gain a foothold early, rather than just saving but never catching up with the rate of the rise in the prices of property and residential homes.

To get an accurate idea of how much the insurance will cost you, an LMI calculator is a great way to determine the price of insurance.

Article Source: http://EzineArticles.com/?expert=Ignacio_A._Sapalo_Jr.

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All About Mortgage Insurance

Monday, December 21, 2009

Update Dec. 21 - 2009 All About "Mortgage Insurance" Information By Insurance Experts

Tuesday, December 1, 2009

Update Dec. 01 - 2009 All About "Mortgage Insurance" Information By Insurance Experts

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