All About Mortgage Insurance: Update August 16 - 2010 All About "Mortgage Insurance" 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)

Home Owners Need Home and Mortgage Insurance Coverage
By River C.

Any one who owns a home, and that includes the majority of us who are making monthly payments to a home and mortgage company, must have insurance coverage on their home. If the home is not paid for yet the mortgage company will insist there is at least hazard insurance cover. The cost of the insurance policy is generally included in the monthly mortgage payments. It is considered part of the PITI that constitutes the total payment we must make each month. The initials PITI represent the Principal, Interest, Taxes, and Insurance.

Taxes and insurance come from escrow accounts

Typically the home buyer takes out a "secured loan" when purchasing a home. This means they have the real estate and home as collateral and if the mortgage payments are not met, they can lose the house to the mortgage company. The term mortgage means a mortgage loan which is considered a "secured loan". Along with the principal payments which must be made on the balance of the home each month, there are also taxes and insurance which must be paid, usually yearly. Taxes are generally paid to the county in which the home lies, while insurance payments must go to an insurance company which provides various types and amounts of coverage.

Home and mortgage insurance cover is usually based on how much the home is worth and that amount will usually increase year to year. The mortgage company makes once a year payments to cover both the taxes and the insurance premium and then will add this amount on to the mortgage payments to be made by the homeowner each month. This amount is deducted from an escrow account which is an estimate of taxes and insurance cost for that year. Mortgage companies then determine how much is to be added on to the PI or principal and interest payments to cover the amount owed for the TI or taxes and insurance, prorated over the length of one year. In other words, one twelfth of the total cost of the insurance premium and one twelfth of the taxes will be added on to the monthly payment. This way the home owner does not need to pay the entire tax bill or insurance premium at one time.

Types of insurance coverage vary

Basic home and mortgage insurance cover, generally called hazard insurance, is designed to protect the home buyer from loss if damage occurs to the home. The type and amount of coverage depends on the location of the home, the value of the home, and many other factors. The structure itself as well as personal property inside the home and garage will be evaluated and their worth may increase year by year. Loss of use of the home, which may include added living expenses while repairs are made to the home, is usually included in the basic policy. Fire, flood, earth quake, hurricane, and other disasters may be part of the policy and sometimes involve extra coverage.

Liability coverage should be included in home and mortgage insurance and will provide coverage in case of accidents at the home and in some policies, cover the home owner when away from their home. Visit our website for more information.

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