All About Mortgage Insurance

Update Sept. 02 - 2010 All About "Mortgage Insurance" By Insurance Experts

2010-08-31T12:38:00.001-07:00

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)

What is Lenders Mortgage Insurance and When Home Refinancing Do I Require It?
By Kezz Roby

Questions often asked, are "Do I need Mortgage Insurance for Home Refinancing?" and "What is Mortgage Insurance?"
In this article I will clarify what Lenders Mortgage Insurance is, how it works and influences you when Home Refinancing.
The function of Lenders Mortgage Insurance (LMI) is to protect the home loan lender from suffering a loss of money in the event of a borrower defaulting on their mortgage, resulting in foreclosure and a ensuing mortgagee sale. If the proceeds from the mortgagee sale are insufficient to pay back the home loan in full, LMI will pick up the shortfall for the home loan lending institution.
LMI should not be confused with Mortgage Protection Insurance (MPI), which protects a borrower against their lack of ability to repay their mortgage in the outcome of an unexpected circumstance like unemployment, illness or death. MPI covers payment of your mortgage instalments and/or your home loan balance. CPI insurance is not mandatory and is solely the decision of the borrower. The premium for CPI is paid yearly and usually varies based on the size of the home loan.
Why is Lenders Mortgage Insurance required?
Lending institutions including Banks, Building Societies, Credit Unions and non bank lenders, either use cash from deposits held in savings accounts and term deposits, or borrow money to provide home loans to borrowers for home refinancing, purchasing, construction or equity purposes. By using other peoples' money to fund home loans, the lending institutions create an obligation to repay that money to the suppliers of the funds while at the same time taking on the risk that they may not get all or some of the cash back that they advance.
Even though they hold real estate property as security for the home loan, the value of the real estate property may decline due to market forces, corruption or damage to the improvements, resulting in the security not having an adequate amount of value to cover the size of the home loan. To offset their obligations to the suppliers of the loan funds, the lending institutions effect LMI to offset any likely shortfall.
Do I benefit from Lenders Mortgage Insurance?
Before LMI was offered, lenders desired borrowers to have a deposit of no less than 20% when buying a dwelling or equity of 20% when refinancing a home to minimise the risk of lending and protect them against possible loss in the event of foreclosure. Now with the capability to pass on the risk of loss to an insurance company through LMI, lenders are prepared to allow a lesser deposit for purchases and less equity for home refinancing.
Also, if lenders didn't use LMI to alleviate lending losses, then those losses would need to be recouped from the earnings of other home loans, in effect increasing home loan interest rates. To stay away from this, lending institutions opt to effect LMI and have the insurance company take on the risk and bear any loss.
By lenders using LMI, the benefit to borrowers is that they are able to buy a property using a lesser deposit or refinance a property with a lesser amount of equity and/or obtain lower interest rates than they would otherwise be able to do with no LMI.
Please note, that even though LMI does give some benefits to the borrower, it will not cover the borrower against loss ensuing from foreclosure. LMI ONLY PROTECTS THE MORTGAGEE as in effect, they are the beneficiary of the insurance policy! In the event of a claim for loss, the mortgagee will get the proceeds from the LMI claim, not the mortgagor. Any loss resultant from foreclosure, in spite of of LMI, is a loss incurred by the borrower and will remain as such. The only distinction being is that the borrowers legal responsibility to the finance provider for the loss will move as a legal responsibility to the LMI provider for the loss in the episode of an LMI claim by the mortgagee.
Who pays the Lenders Mortgage Insurance Premium?
The LMI providers contract of insurance is with the lender and the premium is payable by the lender though in certain instances the lender may pass on the cost of the insurance to the mortgagor as a fee of providing the home loan.
Home loans where a deposit or equity of less than 20% is allowed represents a higher risk to the lender, and in this case the lending institution will generally pass the price of LMI on to the mortgagor as a fee for them being able to acquire a home loan that they would generally not have been able to obtain.
What is the cost of LMI and how is it paid?
The premium for LMI is a one off premium due upfront at the time of settlement of the mortgage with payment of the premium being the liability of the lending institution. The lender will subtract the premium from the loan proceeds if and when the cost of LMI is to be met by the mortgagor.
The premium cost will vary depending on the size of the loan and the ratio of the loan size to the value of the security i.e. Loan to Value Ratio (LVR). The higher the LVR the more expensive the premium, also the bigger the home loan amount the more pricey the premium.
Are the providers of Lenders Mortgage Insurance reputable?
LMI providers operate under strict government regulation to make sure they maintain sufficient liquidity to meet claims, as well as hold adequate funds in reserve, in the event that a large number of claims are made in a short length of time or rise substantially.
How is Lenders Mortgage Insurance arranged?
The granting of LMI is not automatic and must be applied for by way of application to the LMI provider. Should your home refinancing require LMI, your Mortgage Broker, Mortgage Planner or Consultant in conjunction with the lender, will organize all the necessary documentation and present you with all the information about the application process.
Provided the borrower, home loan structure, home refinancing purpose and security property meet with the appropriate LMI provider underwriting guidelines an LMI Certificate of Cover will be issued to the mortgagee.
As you can understand, Lenders Mortgage Insurance does offer some benefit to the borrower in the form of lower interest rates however it is principally used as a risk mitigation instrument by the lender. When refinancing a home the benefit of LMI is greatest when the security property equity is less than 20% as the mortgagor would generally not be able to obtain such a home loan. Nonetheless that increased benefit arrives at a cost in the form of increased home refinancing expenses.
So when home refinancing it is crucial to preserve as much security property equity as possible, in effect reducing the price tag and/or requirement for LMI and balance the worth being achieved from the home refinance with the cost of LMI.
Kezz Roby is a leading Australian Mortgage Planner well known for his Home Refinancing Tips & Strategies that have greatly benefited many Australian Homeowners.
For more quality information on Homeloans plus Refinancing Tips & Tricks visit our blog /website - refinancingcampbelltown.com.au

Back To Insurance Contents

Back To General Contents ( Home )

Back To The Top

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

Update August 16 - 2010 All About "Mortgage Insurance" By Insurance Experts

2010-08-15T08:11:00.000-07:00

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.

Back To Insurance Contents

Back To General Contents ( Home )

Back To The Top

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

Update July 30 - 2010 All About "Mortgage Insurance" By Insurance Experts

2010-07-29T09:22:00.000-07:00

Reverse Mortgage Insurance
By John Andrew Jr.

What is reverse mortgage insurance? What are the requirements in order to take advantage of reverse mortgage? First and foremost, the term reverse mortgage must be defined in order to answer both of these questions. To put it briefly, it is a type of mortgage available for old and senior individuals as mandated by the law and the government of the United States. Reverse mortgage insurance on the other hand is a type of insurance that caters to the rights of both the creditor and debtor in a reverse mortgage in case one or either of them is unable to comply with the agreement entered by them through the reverse mortgage contract. This is a remedy that will ensure that the party that is deprived of compensation will still be able to get something of equal or greater value regarding what has been insured through the mortgage agreement.

In order to avail of this reverse mortgage insurance, one must first be able to comply with the requirements of such a mortgage. Firstly, the person availing of this kind of mortgage must be at least 62 years of age. This is a requirement that cannot be waived since the spirit of the law that created this type or mortgage specifically ensured that the individuals who are already of old age have better benefits than younger ones. This coincides with the principle of the older the person gets then the easier and more lenient the requirements to avail of this mortgage become. The debtor or borrower of the money must be exactly 62 years old once the contract of mortgage takes effect as specified in the date contained in it.

Secondly, the debtor or borrower must undergo credit counseling. This credit counseling must be done with a financial specialist or expert through a third party counseling service provider. The objective of this requirement is to ensure that the senior citizen debtor is well informed of what will happen once he or she engages in this reverse type of mortgage. This will equip him or her of the necessary knowledge that will ensure that he or she will not be, in anyway, put into a position that is not favorable. This is a method of the law in itself to protect the rights, privileges and interests of the old individuals of the United States of America.

Thirdly, the debtor must not have any subsisting or pre-existing mortgage in order to avail of this kind of mortgage. This is the protection allotted by the State and the law in order to protect the rights, interests and privileges of the creditor or lender of the money. This will ensure that both the creditor's and debtor's rights have equal protection of the laws that pertain to mortgages and loans. If you want to avail of reverse mortgage insurance then make sure that you first comply with these three requirements in order to prevent any further complications regarding the mortgage itself together with the insurance for such mortgage that you will avail of.

Your base for information about Reverse Mortgages. Let us guide you through the requirements, costs, and all the other details that you need to know. Learn the answers to all of your questions and become more informed in order to get the best deal that you can. Reverse Mortgage Insurance

Back To Insurance Contents

Back To General Contents ( Home )

Back To The Top

Update July 13 - 2010 All About "Mortgage Insurance" By Insurance Experts

2010-07-12T18:55:00.000-07:00

The FHA 203(k) Rehabilitation Mortgage Insurance Program - The "Fixer-Upper" Loan

By Jim Hodson

Under Section 203(k) of the National Housing Act, the Federal Housing Administration (FHA) offers mortgage insurance on loans issued by approved FHA lenders to help borrowers purchase and rehabilitate a home. The home should be one that the borrower plans to use as their primary residence. This same insurance program also covers cash-out refinance mortgage loans whose proceeds will be used by the borrower to rehabilitate their current home.

Why the "Fuss" About FHA 203(k) Loans?

Trying to buy a "fixer-upper" home and rehabilitate it can be a very complicated process for borrowers. It typically requires taking out multiple short-term loans with high interest rates. These loans often require a balloon payment when they become due.

The FHA created Section 203(k)-insured loans to address the needs of such borrowers wanting to rehabilitate new or existing homes. This program makes the process of buying and fixing up a new home much simpler by providing the borrower with one long-term mortgage loan that covers everything.

How Do Section 203(k) Loans Work?

There are several basic requirements for a home loan to be covered under Section 203(k). The home must be at least one year old, and the planned rehabilitation must cost a minimum of $5000. The property value of the home must fall within the FHA loan limits for that area of the country. FHA maximum loan limits differ for each county, borough, or county in the state where the property is located..

When a 203(k) loan is closed, some of the money goes to pay for the purchase or refinancing of the home. The remaining money is placed in an escrow account to pay for the work on the home. Funds from the escrow account are paid out as rehabilitation work is completed.

Work Covered By Section 203(k)

Many types of improvements can be covered under this program. They include but are not limited to:

modernization of the home
correcting health or safety hazards
repairing or replacing plumbing
repairing or replacing electrical
repairing or replacing roofing
repairing or replacing floors and floor treatments
landscaping and other work to improve the appearance of the property
energy efficiency improvements

Other types of home improvements are covered. You will want to consult your lender to find out if your particular rehabilitation needs can be covered under the program.

Who Can Apply?

Anyone can apply for an FHA 203(k)-insured mortgage as long as they can afford the monthly house payment based on their debt-to-income (DTI) ratio. To apply simply contact and FHA-approved lender. Many services are available online where you can fill out a single form and get referred to multiple lenders allowing you to compare multiple rates and loan offers.

J Hodson operates FHA-Loan.org, an online resource for borrowers seeking information about FHA loans. There you can find more information on FHA 203(k) loans including the specific FHA maximum loan limits that apply to the particular county, borough, or parish where your property is located.

Back To Insurance Contents

Back To General Contents ( Home )

Back To The Top

Update June 23 - 2010 All About "Mortgage Insurance" By Insurance Experts

2010-06-23T05:53:00.000-07:00

Considering Long-term Mortgage Insurance

By James P White

Taking out life insurance that includes critical illness cover was the sole method of gaining long-term mortgage protection until recently. There are now options available to provide long-term payment protection as a substitute to short-term payment cover.

The traditional method of gaining long-term mortgage insurance was to include critical illness insurance with mortgage life cover. This form of protection would payout a lump-sum should the policyholder suffer a 'critical illness' condition specified in their policy document. The most common types of illnesses covered include heart attack, stroke and cancer. The payout from the policy could be used to repay the loan in full if the amount of cover was set equal to the amount of debt outstanding at the start of the policy.

In addition to the cover mentioned above, many households would also take out mortgage payment protection to cover monthly loan repayments should the policyholder have to cease working due to short-term accident, sickness or unemployment. One of the greatest issues with these policies is that they will only ever payout for a maximum period of 24 months.

If serious illness insurance is added to mortgage life cover then one would hope that any illness that lasts more than 24 months would be covered, however, there is a risk that the illness is not specified in the policy. New long-term payment protection plans avoid this issue as they can payout until the end of the mortgage loan for nearly any medical condition that prevents the policyholder from working. Thus, this new form of protection provides both an increased length of cover and an increased scope of protection. The main downside is that it can cost considerably more, especially for older individuals.

Article produced by James White of Drewberry Mortgage Insurance, specialist providers of information, advice and broking services in the mortgage protection insurance market.

Back To Insurance Contents

Back To General Contents ( Home )

Back To The Top

Update June 03 - 2010 All About Mortgage Insurance By Insurance Experts

2010-06-03T07:34:00.000-07:00

Disadvantages of Mortgage Life Insurance - Why Term Life is Better

By Denise M

If you are in the market to buy a home or already have a mortgage account, you are probably looking for ways to protect your loved ones from future mortgage debt, in the event of your death. The most common options are mortgage life policy and term insurance.

Term life insurance
A term life policy is an insurance policy that you independently take out with a insurance company, with the idea that a part or all of the proceeds be used to pay off your mortgage. You name a beneficiary, usually your dependants, who are instructed to use the money to settle your mortgage account. Your beneficiaries can retain any left over amounts.

Mortgage life insurance
A mortgage life insurance policy is not offered by a insurance company, but by banks and other financial institutions that have your mortgage. The financial institution is the beneficiary, and the product is designed to have level premiums with decreasing death benefits. Usually mortgage life insurance doesn't require a medical exam.

Disadvantages of mortgage life insurance

Mortgage life insurance coverage decreases with time: The amount of cover decreases in parallel with the amount outstanding on your mortgage. However, your premiums remain level, and you end up paying more for less coverage over the years. Of course, the way it is designed, you don't receive any benefits on it if you outlive the term. The bank retains any left over amount.
A minimum stipulated time period to qualify for a payout: Usually, mortgage insurance doesn't payout in the first six months of the policy. That exposes the mortgagor to a lot of risk.
Excludes pre-existing medical conditions: Though mortgage insurance doesn't require a medical exam to determine premium rates, any pre-existing medical conditions are excluded from the policy.
If you wish to refinance, you need to take out a fresh mortgage policy If you decide to refinance, your existing mortgage life policy ceases, you will have to take out a fresh policy. This can prove to be quite a bit of extra trouble.

Why term life insurance is better

Term life is more affordable: Because the underwriting process in mortgage term life is not as precise as that of a term insurance policy, the premiums can be quite high for mortgage life insurance. Term life is generally more affordable, with its economical premiums.
Death benefits in term life go to the insured's beneficiaries: When you use a term life policy to cover your mortgage dues, your beneficiaries are in total control of the money. If you die many years into your term policy, your mortgage dues would have gone down considerably, which means that your beneficiaries get to retain any leftover cash.
Term offers a choice of policy formats: While mortgage life insurance has a decreasing term format, with term life you can opt for either decreasing term insurance or level term insurance. A decreasing term insurance policy will provide your beneficiaries with only enough money to clear your mortgage. A level term insurance policy on the other hand has a fixed death benefit amount, and therefore can be used to clear off more than just your mortgage amounts. For higher premiums you can also add more protection for other reasons, such as to replace your income, take care of your kids' college fees, etc.
Doesn't require a fresh policy if you decide to change As mentioned earlier, if you decide to refinance, your mortgage life policy ceases. However, with term, even if the underwriting process requires your mortgage documents, the life insurance can't be revoked each time the structure of your finances change.

Make sure you are covered adequately
When you use a term life policy to cover your mortgage, remember that you need to take out additional term insurance to cover your other financial obligations in the event of your death. Look at riders such as critical illness and disability to cover every possibility.

Life is uncertain. With the right mortgage life cover coupled with comprehensive life insurance planning, you can be sure that your loved ones are taken care of when you are no longer around to provide for them.

About AccuQuote:
AccuQuote is a leader in providing term insurance quotes to people across the United States. In 1986 it began operating with a single goal: to make the process of buying term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term life insurance rates by comparing thousands of life insurance policies from dozens of top-rated carriers.

Back To Insurance Contents

Back To General Contents ( Home )

Back To The Top

Update May 17 - 2010 All About Mortgage Insurance By Insurance Experts

2010-05-17T06:46:00.000-07:00

Useful Information on Mortgage Insurance Rates

By Ryan Trimble

A lender likes when the buyer puts down at least 20% towards the price of the home. They do not appreciate a high loan to value (LTV) ratio, certainly not one greater than 80%. This means that on a house appraised at $200,000, $40,000 is needed to put down before closing. If this is not possible, either the home cannot be purchased or mortgage insurance (PMI) needs to be purchased.

The purpose of mortgage insurance is to insure the bank or lender against the buyer not paying and perhaps going into foreclosure. The buyer is paying to insure the bank's risk in making the loan to someone who did not put down 20% of the purchase price of the home. If the buyer puts down at least 20%, the purchaser is said to have "skin in the game."

Mortgage insurance rates can run as high as 3%. That would entail a payment of $1,500 for a $200,000 home. In the past the entire PMI was paid at closing. It has since changed and the insurance will run for the length of the loan. This gives the homeowner an incentive to end the payments.

The PMI will be held in escrow. The amount will be added to other escrow items such as home insurance and taxes. when purchasing a home, these added costs must be considered along with the specific monthly mortgage payments.

If the homeowner puts more money into the home each month, the PMI can be stopped, when the equity in the home reaches 20%. If the house appreciates in price and the Loan to Value Ratio has gone down, the mortgage insurance can also be ended.

The buyer will have to take the initiative in ending the mortgage insurance. There is no incentive for the bank to remind you that the insurance can be ended. After all, they are still getting additional insurance that the homeowner is paying for.

Ryan writes numerous articles on obtaining mortgage protection cover and about the facts behind mortgage protection and its importance.

Back To Insurance Contents

Back To General Contents ( Home )

Back To The Top

Update April 26 - 2010 All About "Mortgage Insurance" Information By Insurance Experts

2010-04-26T06:22:00.000-07:00

10 Benefits of Mortgage Insurance

By Arjun Rudra

1. Take it with you when you move. If you have a mortgage that's portable, you can transfer its terms to a new property in the future. This same option is available when you buy mortgage insurance, which can save you premiums when you move.

2. Be eligible for a better interest rate. Mortgage insurance provides a lender with the flexibility to offer you the same competitive mortgage interest rates available to home buyers with a larger down payment.

3. More down payment options. Don't let the down payment be the barrier to your home ownership dreams. There are many mortgage insurance products that will help you to achieve home ownership. Let's discuss the options that suit your situation best.

4. Buy, instead of renting. If you're paying rent right now, it can be a good move to consider buying a home that has similar monthly carrying costs. You'll enjoy the freedom of making your living space into your own home with your personal touch.

5. Overcome traditional barriers to financing. More and more homebuyers who may not have qualified for a mortgage are benefiting from mortgage insurance - for example, those who are self-employed or work on commission. With mortgage insurance, people who have good credit but might not meet conventional lending criteria can qualify for the financing they need.

6. Own and enjoy a vacation property. If your financial situation is in good standing and you are thinking about buying a vacation property, there are mortgage insurance options that will allow you to do so. Be sure to ask us about what will work best for you.

7. Get money back on an energy-efficient home. If you purchase an energy efficient home or refinance an existing home to make energy-saving renovations, you could be eligible to receive a 10% refund on your mortgage insurance premium if your mortgage is insured with Genworth Financial Canada.

8. Save on household purchases. When buying your first home, you'll find expenses can add up quickly.

9. Home ownership on your terms. With the right preparation and resources, you can buy a home that best suits your lifestyle. Mortgage insurance provides you with innovative options to help get you into home ownership.

10. Get help when you need it. Whether from a job loss, a serious illness, or a marriage breakup, financial difficulties can arise when you least expect them.

In 2005, Arjun read his first book on investing. For Arjun, that experience sparked a long, extremely exciting and fulfilling journey towards achieving financial freedom at, what some might consider a very young age. While that journey is ongoing and has taken countless hours till date, the elation of finding a truly undervalued stock or discovering a special situation in the capital markets wields a reaction that is probably akin to a prospector discovering a nugget of gold. Arjun founded Investing Thesis to chronicle his journey in the hopes that his successes and failures might work to the benefit of someone else.

Update Mar. 17 - 2010 All About "Mortgage Insurance" Information By Insurance Experts

2010-03-28T07:15:00.000-07:00

Everything You Need to Know About a Negative Amortization Mortgage

By Mike Makler

Most Property Owners are conditioned to believe that a Negative Amortization Mortgage is a Bad thing. Before you get that next mortgage shouldn't you get the facts so you can decide for yourself what is best.

The First Question many people have is what is a negative Amortization Mortgage. A Negative Amortization mortgage is an Adjustable Rate Mortgage with predictable payments over the life of the mortgage. On an Adjustable rate mortgage you can have interest rate caps and/ or payment caps. A Payment Cap says your payment can never increase by some cap usually every year. So if you have a $500 Month Payment on an Adjustable Rate Mortgage with a payment cap of 7.5 Percent per year your monthly payment cannot be higher then 537.50 the following year.

Now if your interest rate were to rise enough to force the needed payment to be $540.00 a month you would be in a negative Amortization situation.
The Additional $2.50 a month would be added to your principle. You can think of a Negative Amortization as an automatic loan from your bank. Every month when you get your statement from the bank you will see at least your payment options. Option 1 is the Minimum payment. If option 1 would force a negative Amortization you will also see an Option 2 which would be the interest only payment. You may also see an Option 3 which would be the payment needed to pay off your loan in 30 Years. Some banks will give you additional options like 15 Year pay outs.

The Downside of a Negative Amortization Mortgage is that in areas where real estate values don't rise or even fall you could end up owing the bank more then your home is worth if you only make the Minimum payment each and every month.

The Pros of a Negative Amortization is that is very easy to create a annual budget since you know that your mortgage payment will never exceed the payment cap. The flexibility to pay more is should you be able to is also a nice plus

Another Pro of a Negative Amortization Mortgage is that it offers very low introductory rates with payments fixed for the first 5 or 10 years. This means anyone can buy a home and know that for the next 5 or even 10 years their monthly payment will be the same.

Here is an Example of 2 different Loans. A Negative ARM loan with a fixed payment for 5 years based on an interest rate of 1.95 Percent or a 30 year Fixed Rate of 5.5 Percent, A 250,000 Loan at 5.5 percent would run about $1420.00. A 380,000 Loan at 1.95 percent would run about $1395.00 a month. For $25 a Month lower payment you are controlling $130,000 more property. That extra $130,000 would grow by $35,000 in the first 5 year at a modest 5% appreciation Rate ($52,000 at 7 Percent, $79,000 at 10 Percent) At the end of 30 Years at 5 Percent that $130,000 would grow to over $560,000. (Over $989,000 at 7 Percent, Over 2.2 Million Dollars at 10 Percent)

When one considers the payment flexibility, the low starting introductory rates, a Negative Amortization Mortgage will allow most homeowners to control more real estate for the same or less money. The Negative Amortization Mortgage is certainly something to be considered by most homeowners or prospective homeowners.

About the Author

Mike Makler Offers Financial Services (Mortgages,Life Insurance, Annuity) in Florissant Missouri which is in North St. Louis County Missouri Just Across the Bridge from St. Charles Missouri

Call Mike at 314 398-5547

Visit Mike's Web Page:

[http://ewguru.com/finance]

For Missouri Specific Insurance and Loan Questions:

[http://ewguru.com/Mo-Finance]

Get Mike's Newsletter Here [http://ewguru.com/fin-news]

Back To Insurance Contents

Back To General Contents ( Home )

Back To The Top

Update Mar. 09 - 2010 All About "Mortgage Insurance" Information By Insurance Experts

2010-03-09T12:26:00.000-08:00

The One Product Better Than Mortgage Insurance? Term Insurance

By B. F. Khan

Now that you have read "10 Reasons MORTGAGE INSURANCE is not a good investment" and if you missed it, check out the investigation that was done by CBC Marketplace titled "In Denial"

Lets continue on what is considered the one product to protect your family!

TERM INSURANCE! YES! TERM INSURANCE!

All the experts agree that TERM INSURANCE is a better product than mortgage insurance.

Ask Suze Ormond or check MSN money and of course check Personal Finance for Canadians.. Dummies book. Here are the reasons why:

1.You are the policy owner and choose the beneficiary. You choose who should get the money because you are in control and not the institution.

2.Death benefits go to your designated beneficiary who can use the funds as needed.Your survivor gets to choose how the money is spent. i.e. pay off the mortgage, pay off debts, invest etc.

3.Coverage amount is determined by you based on a complete needs analysis. Your coverage will take into account, mortgage, debts, survivor income, children's education etc.

4.Coverage remains the same for the duration of policy. Regardless if the mortgage goes down or you have paid off all your debts, the amount you are covered for remains the same for the same price.

5.Policy in good standing remains in force for duration of policy term chosen. Pay your premiums and you are covered for the term that you choose.

6.Policy is portable and remains with you. If you move to another home, your policy remains the same. You do not need to renegotiate for a new policy. Add a rider if you need more coverage.

7.Underwriting and evaluation of medical history is done prior to policy being issued and won't be cancelled later if health issues arise. That explains itself. At least you will know if there are any medical issues up front.

8.Monthly premiums do not start until after you have been approved for a policy.

9.Preferred rates are available for individuals with excellent health. Great health... lower premiums.

Now go back and rethink that mortgage insurance... read previous article to really understand the difference.You need to make sure you are making an informed decision about protecting your future. Now which one will you choose?

B. F. Khan is a new entrepreneur who has found out how to minimize her time and maximize her profits from using the internet to talk about her business.

Back To Insurance Contents

Back To General Contents ( Home )

Back To The Top

Update Feb. 15 - 2010 All About "Mortgage Insurance" Information By Insurance Experts

2010-02-15T04:31:00.000-08:00

Cheapest Term Life Insurance - Match the Repayment Terms of Your Mortgage

By Elanora T. Kelly

Your current condition as you age plays a great role in your life insurance rates. In order to make a good assessment on your life insurance needs, Competitive Term Life Insurance will aid in evaluating your needs.

Competitive Term Life Insurance quote will provide the best deals there is in the market. In case like death of a partner, term life assurance will provide funds if you are short of assets.

If you canvass on the availability of life assurance that will best suit your needs, you need to determine the precise cost of income that you will lost when a spouse dies. Having this estimated, compute for the amount in order for you to know how much capital you will need to fill in that income. And how will you make it possible, through a preferred investment.

This way, you will be able to determine on the perceived loss of spouse and loss of income provided that you will need to survive when that time comes.

You will need to consider also the health of your parents, your previous financial commitments, and the needs that you have to meet for children still living under your roof.

It is best that you make financial assessment annually for your goals. You may need a lawyer before making a big financial decision to help you legally with process. this will keep your status on competitive life insurance updated and eventually will help assess your credibility to avail of insurance quotes in the future given your individual financial adjustments.

Term life insurance has gained credibility in the recent years when you talk about insurance quote credibility and affordability. This is the amount of money you are going to pay to make your term life insurance in effect. No matter the health condition, as long as you diligently pay your insurance policy, you will still have the policy coverage.

Term Life assurance policy is renewable within a certain time span. You have varied options of paying our premiums. It would matter with regards to the option as annually or monthly.

You can save on your premiums. You do this by selecting from the number of choices available. This will vary depending on the company protocols. For you to make a good choice, you should have a ready estimate on the amount of money that your family will need for immediate financial needs. Also, you need to determine how much income will be lost and how much will be needed to sustain your household. With a rough estimate, you will be able to assess what insurance premium will suit your individual needs to insure yourself.

In order to secure a better insurance quote, an alternate approach to your lifestyle will make a huge impact for you to avail the best offers that any company can provide. Your overall health condition will greatly influence your candidacy to purchase a term life insurance quote of your choice. Now, finding the best insurance quote has never been easy and practical. You just need to make choices on availing cost-effective quotes.

When performing a Life Insurance Comparison be sure to list your requirements and check out these companies.

Learn More about Insurance

For information on all types of Cheapest Term Life Insurance come to lifeinsurancetypes.org

Back To Insurance Contents

Back To General Contents ( Home )

Back To The Top

Update Jan. 27 - 2010 All About "Mortgage Insurance" Information By Insurance Experts

2010-01-27T04:35:00.000-08:00

Pros and Cons of Mortgage Life Insurance

By Denise M

Mortgage life insurance is a type of insurance wherein the policy holder is able to clear mortgage liabilities in the event of the untimely death of the insured. In such a case, death benefits are equivalent to the outstanding balance on the loan. Quite clearly, this security gives tremendous peace of mind that no matter what, despite the worst case scenario, your family will always have a home to live in. Apart from that, many insurance policies offer optional provisions which include coverage for critical illness. With this option, the insurance company will pay out the outstanding loan in case you qualify conditions for terminal illness.

However, it is vital to examine the pros and cons of mortgage insurance before you make up your mind about purchasing a mortgage insurance policy. One of the major advantages of mortgage life insurance is that it is easy to obtain. In these days of uncertainty and insecurity, it may make sense to opt for a mortgage insurance policy to make sure your loved ones have a home to stay in, even if, anything were to happen to you.

Here are some advantages and disadvantages of a mortgage life policy to help you make an informed decision:

Advantages of Mortgage life insurance

Guarantees clearing your mortgage payment: The death benefit of mortgage life insurance pays off the outstanding balance on your mortgage, and thereby guarantees a home for your family in case of your death. What is also important to note is that, unlike a regular life insurance policy, death benefits from a mortgage insurance policy is not paid to your loved ones but goes directly to the mortgage company towards the payment of your outstanding mortgage. This is useful to ensure that death benefits are used primarily for the purpose of clearing off the mortgage.
Health qualifications for a Mortgage Insurance are considerably lower than qualifying for a regular life insurance policy: The health standard to meet to buy mortgage insurance is much lower than a regular term insurance policy. If you are in bad health then a regular life insurance policy may require you to pay higher premiums. If you suffer from severe health impairments, you may not even qualify for regular life insurance. In such cases, mortgage lifeinsurance is a very viable option for you. It gives you peace of mind by allowing you to get coverage for what is probably your biggest liability-your home.
Financial help during terminal illness: Mortgage life insurance policies may provide protection coverage in case of terminal illness, provided, your mortgage insurance includes terminal illness benefits and you opt for it. This indeed comes as great savior for the policy holder who contracts a terminal illness and can no longer work or earn money to pay the monthly mortgage. In such cases, the mortgage life insurance company will provide accelerated death benefits to pay off the mortgage.

Disadvantages of Mortgage Life insurance:

No payout until the stipulated time period is passed: Regardless of the situation there is no payout within the first six months of the policy. So in case any calamity strikes the insured before the stipulated time, the insured will not receive anything.
Mortgage life insurance coverage decreases with time: In case of your death, the amount of cover will depend on the term of insurance, which decreases more or less in line with the amount outstanding on your mortgage. As a result, you end up paying more for less coverage over the years. That essentially means by the end of the plan, there will be no benefits if you outlive the policy.
Excludes any Pre-existing medical condition: Any pre-existing medical conditions (terminal or otherwise) before the investment are excluded in the policy. Therefore, such conditions cannot be claimed if the situation arises.
Fixed monthly premiums Although insurance cover reduces with time the monthly premiums still remain fixed throughout the life of the policy.

AccuQuote is a leader in providing term life quotes to people across the United States. In 1986 it began operating with a single goal: to make the process of buying term life insurance as easy as possible for its customers. Their experienced professionals consistently deliver the most affordable term life insurance rates by comparing thousands of life insurance policies from dozens of top-rated carriers.

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

Pros and Cons of an Option Arm Mortgage

By John Hurlbut

An Option ARM (adjustable rate mortgage) or pick-a-payment mortgage is the most versatile type of mortgage a homeowner can choose. These loans are very attractive to borrowers looking for an affordable monthly payment option or borrowers with a fluctuating monthly income; these loans are also sometimes called cash flow arms. The borrower who chooses this type of loan has four payment options they can choose from each month.

Option one is commonly known as a negative amortization payment. This is traditionally a very low payment offered at an initial teaser rate for the first year (between 1% and 2%) and thereafter tied to an index such as the COFI (Cost of Funds Index), the CODI (Cost of Deposit Index), or the COSI (Cost of Savings Index). This option allows for the principal of the loan to grow or negatively amortize. For example if the borrower pays the initial payment, say $1000, a month and the interest only payment (usually option two) is $1500 per month the difference between the two, $500, is added to the principal of the loan. Savvy borrowers closely monitor the level of negative amortization that they allow to accrue. If the amount of the principal reaches 110% of the original principal balance the loan is then recast and the borrower looses the choice of option one.
Option two is commonly known as an interest only payment. When the borrower chooses this option only the interest owed on the loan is paid. With this option a borrower's principal remains the same. Option two is normally no longer an option after seven years. This is because most or all of the interest due on a loan amortized over 30 years is paid off in the first seven years.

Option three is a standard 30 year amortized payment. This option allows for a small amount of principal as well as all the interest on a mortgage to be paid monthly. If a borrower makes one 30 year amortized payment a year an option arm will not be recast. The third option is the one most borrowers make and is usually carries a relatively fixed rate. The rate is determined by an margin (the bank's profit) added to the index to which the loan is tied.

Option four is the quickest way to pay off a mortgage. This option is based on a 15 year amortization schedule. While the most costly of the four options it is the option that saves the most money in the end. When borrowers choose a 15 year amortization for their loan they can save tens of thousands of dollars in interest.

An option arm is a very versatile loan. Borrowers should be sure to realize that the first option is a teaser rate, set for a fixed amount of time, and the initial payment will fluctuate after the first year. Smart borrowers should qualify for the 30 year payment, try to make the 15 year payment, and exercise the option for a lower payment only if cash is needed.

For more information on Mortgage Loans, please go to http://www.nicehousesite.com/ and get your FREE REPORT On Private Mortgage Insurance, what it is and why it's so important! Also, many good articles on Mortgages, Creditors, Brokers, Deeds of Trust, everything you must know to get a Mortgage in today's market.
Thank you, John Hurlbut

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

Back To Insurance Contents

Back To General Contents ( Home )

Back To The Top

Update Jan. 08 - 2010 All About "Mortgage Insurance" Information By Insurance Experts

2010-01-08T05:19:00.000-08:00

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

FHA Loans

By Max Fischer

During the recent economic crisis, credit markets dried up and mortgages became difficult to obtain, especially for people with poor credit. Yet millions of Americans still want to achieve the dream of owning their own home. For homebuyers with a low credit rating, it can be difficult to figure out the best option; no one wants to get ripped off by a mortgage or loan scam. Fortunately, the federal government offers programs to obtain FHA loans that can help people with shaky credit to purchase a home or condominium.

What are FHA Loans?
Here is a brief overview of the FHA. In 1934, during the Great Depression, the U.S. Congress created the Federal Housing Administration (FHA). The purpose was to stimulate home construction, reduce unemployment, and offer loan insurance programs designed to provide affordable housing for people who would otherwise be unable to purchase a home. In 1965 the FHA was incorporated into of the Department of Housing and Urban Development's (HUD) Office of Housing. Today, the FHA assists homebuyers by providing mortgage insurance on loans made by lenders throughout the United States and its territories.

The FHA does not make loans. It does not build, buy, or sell houses. If you are buying a house or condominium, you do not apply directly to the FHA for a loan. You apply through an FHA approved mortgage lender such as a bank.

What does the FHA do? The FHA helps homebuyers who meet FHA loan guidelines by insuring their mortgages against default. FHA mortgage insurance provides the lender with protection against losses, and the lender bears less risk because if the homeowner defaults, FHA will pay a claim to the lender. This insurance, by reducing the lender's risk exposure, means lenders can approve mortgages for people who may otherwise have trouble getting a mortgage.

For the homebuyer with bad credit, the basic steps are these:

Apply to a FHA approved lender such as a bank or mortgage company.
The lender may ask that you apply for FHA mortgage insurance. Or, you may request that you be considered for FHA mortgage insurance.
To qualify for insurance, loans must meet established FHA loan guidelines.
The FHA investigates your finances and, if the risk is deemed favorable, insures the lending institution against loss of principal in case you fail to pay your mortgage.
If you meet FHA loan guidelines and are approved, you pay an insurance premium (generally one half of one percent) on the balance owed.

What makes FHA Loans Attractive?

With FHA mortgage insurance, the borrower receives several benefits:

A home appraisal by an FHA inspector
A lower interest rate on the mortgage than the lender might have offered without FHA mortgage protection.
The borrower is eligible for up to 96.5% financing, which means that down payments can be as low as 3.5% of the purchase price.
The borrower is able to fold the mortgage insurance premium into the mortgage.
FHA rules put limits on many of the fees that lenders charge in making a mortgage.

FHA Programs
There are a variety of FHA programs, the four below are basic FHA programs that can assist buyers who have poor credit.

Mortgage Insurance for One-to-Four Family Homes (Section 203(b)). This program provides mortgage insurance to protect lenders against the risk of default on mortgages to qualified buyers. This program may be used to finance the purchase of new or existing one-to-four family housing, as well as to refinance a mortgage.
Single-Family Rehabilitation Mortgage Insurance (Section 203(k)). This program allows the borrower to get just one mortgage loan, at either a long-term fixed or adjustable rate, to finance both the purchase and the rehabilitation of the property.
Single-Family Mortgage Insurance for Condominium Units (Section 234(c)). This program insures a loan to purchase a unit in a condominium building.
Insurance for Adjustable Rate Mortgages (Section 251). This program insures home purchase or refinancing loans that have adjustable interest rates.

If you have poor credit and meet the FHA loan guidelines, you may benefit from an FHA loan. It's worth investigating.

ConsumerFinanceReport.com features an extensive library of articles providing information, commentary, and guidance on a variety of personal finance topics, such as FHA loans. To view more articles that educate you on how to pay off debt, please visit our site.

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

Back To Insurance Contents

Back To General Contents ( Home )

Back To The Top

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

2009-12-21T05:38:00.000-08:00

All About Private Mortgage Insurance - PMI

By Ron Beauchamp

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.

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

Back To Insurance Contents

Back To General Contents ( Home )

Back To The Top

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

2009-12-01T03:55:00.000-08:00

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.

Back To Insurance Contents

Back To General Contents ( Home )

Back To The Top

Update Nov, 14 - 2009 All About "Mortgage Insurance" Information By Insurance Experts

2009-11-14T05:06:00.000-08:00

Is it Wise to Cancel Mortgage Insurance?

By Griff Hanning

Some people do not even know that they have mortgage insurance. They bought a house, they pay a mortgage bill every month, and that is all they really know. This is because it is usually tacked on to the mortgage monthly payments. Once you understand what it is, you may want to consider getting rid of it.

Mortgage insurance exists to protect the borrower and/or the lender in case the borrower defaults on the loan payments. According to Wikipedia, lenders usually make it required to have if the borrower has paid less than 20% of the amount borrowed. This is usually private mortgage insurance, but it could also be public mortgage insurance, depending on the insurer.

Your insurance hardly ever covers the entire loan amount. It is often just a percentage of the loan amount. In fact, it is usually a very low percentage. It is definitely a good idea (not to mention a requirement) to have it at the beginning of your loan, but once you have over 20% down or whatever the cut-off was with your insurer, it may be worth getting rid of.

For instance, if you take out a mortgage loan on a house for $200,000 and pay $45 per month for the insurance that will only cover $35,000 if you default on the payments, this will be helpful, but still put you in a bind if something happens. It is usually recommended that after you have paid for more than 20% of the mortgage, you should cancel your private mortgage insurance policy and reallocate that $540 per year towards something else like investments or life insurance that will help protect you for your future by giving your greater gains.

It is important to re-examine your finances on a yearly basis and determine the pros and cons of private mortgage insurance once you have the freedom to get rid of it. Nobody wants to pay for something they do not need.

For other money saving and money management tips check out http://financialsecrets101.com.

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

Do You Need Mortgage Life Insurance?

By Tom Mullaly

Mortgage insurance sounds like something that anyone would be interested in having. To insure one of the largest financial commitments that you will probably ever make must be a good idea after all, right?

Did you know that there might be better ways to ensure that your family's living arrangements are taken care of, in the event that you pass away? One danger with mortgage insurance is that, knowing that the mortgage on the family home will be paid, you might underestimate the amount of insurance that you need for the rest of their living expenses, or things like post-secondary education. In practice, a better strategy is to buy enough term or whole life insurance to cover all the costs that you want to cover. The mortgage may not even be the most relevant expense that your family will have: although it is not pleasant to think about, they may even opt to sell the house. Whether they would or not, ask yourself who actually benefits from the mortgage being paid off? The bank that holds your mortgage benefits, and you are protecting their financial interest. Might any mortgage premium amount you pay each month be better put toward more term or whole life coverage, meant specifically for your family? Greater flexibility, for the same money, would be what you are choosing.

If you decide to approach your family's expenses with this holistic approach, what policy might be best, out of the many available? Obviously each situation is different, and you really must consult with more than one unbiased source of information (i.e. someone not actively engaged in selling you insurance!) but one policy to consider is a return of premium term life policy. The policy can be purchased for a term similar to that of your mortgage, say 15-30 years. If you are still alive when your policy ends, you get all your premiums back, tax-free. Statistics say that it is likely that this will happen, by the way.

Now, if you do still determine that mortgage insurance is what you want, there are a couple of reasons why you should NOT buy it from the bank from which you take out your mortgage. First, you will probably be offered mortgage insurance with a constant monthly premium to cover an mortgage principal amount that is declining over time. That is definitely a bad idea in the later years of your coverage.

Secondly, in the event that you take out a new mortgage or renew your present mortgage with a different bank, you will have to reapply for mortgage insurance, and since you will be older, the new terms may be much less favorable. A 'portable' term policy covers you continuously in either event, and this portability is a great feature.

All in all, think twice about accepting the 'convenience' aspect of the mortgage insurance that your lender will very probably offer you. It is probably not the best type of insurance to pay premiums into each month, and even if you decide that it is right for you, your mortgage lender is almost certainly not the financial institution from which to buy it.

Educate yourself on life insurance policies before you take out mortgage life insurance.

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

Back To Insurance Contents

Back To General Contents ( Home )

Back To The Top

Update Oct. 27, 2009 All About "Mortgage Insurance" Information By Insurance Experts

2009-10-26T22:40:00.000-07:00

Mortgage Payment Protection Insurance - Your Safer Cover!

By Gyan K

What happens in case you are suddenly made redundant due to a loss of job or illness? You may be unable to make your mortgage payments, pay off credit card bills, grocery bills and find it difficult to lead a normal life. You may be unable to meet your basic financial needs. Are you stressed out? Don't worry, you have a protective cover known as mortgage payment insurance.

Your basic insurance cover for income protection will cover you for:

• Mortgage

• Household bills

• Rent

• Credit card payments

• Loan payments

With a mortgage payment protection you will no more be in a dicey situation if you were to lose your job. Due to recession, sudden loss of job has become a common occurrence and there is no security of job. It is evident that more and more people have started to enrol for income protection insurance. Safeguard your monthly income flow, be it accident, illness or a sudden loss of job. Your mortgage payments, rental bills, loan payments, house hold bills, credit card payments, grocery bills etc will be covered by income protection insurance.

Some loan lenders will offer a combination of loan and loan protection in one. This helps a loan borrower to stay relaxed in case of a financial crisis. If he is unable to pay back the loan amount on time due to some unavoidable circumstances, his loan protection insurance will take care of the loan payments. Such income protection if taken on time it will not only protect your monthly payments such as loan payments, credit card bills etc but also safeguard your collateral too. You don't have to lose your home for non payment of secured loans, loan protection cover will do the needful.

To avoid after effects of losing a job one has to make sure he has a protective insurance cover in place. If you are a sole bread winner of your house and you lose a job, think of your dependents at home. By having a protective cover you are safeguarding your dependent's lives too. You need not lose your home which is offered as a security.

You can find discounts on your insurance policy if you reach out to your existing insurance provider. He may be willing to add another insurance cover for a lesser insurance premium. With an uncertain job market, redundancy is bound to occur. Take a wise move and protect your mortgage payments!

Get all your free tips related to Mortgage Payment Protection Insurance from:

Mortgage Payment Protection Insurance

Guide to Payment Protection Policy:
Payment Protection Policy

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

The Easy Mortgage For Bad Credit Solution

By Ryan J. Taylor

When you need to obtain a mortgage for bad credit, there are a couple options you have to choose from. Before you commit to anything, it is crucial that you know your options and spend some time thinking about this important decision. Whatever you decide is something you may be stuck facing and paying off for the next 30 years, so do not take this decision lightly.

Your mortgage for bad credit options are basically the following:

1. Search for and try to find the best offer with your current credit situation
2. Focus on credit restoration to qualify for preferred treatment

There are a number of companies and organizations that will approve you for a home loan no matter what your credit score, but that comes with major consequences. You're likely to pay outrageous fees and the interest you'll pay on the loan will be two to three times the average rate.

As a result, not only will it cost you hundreds or even thousands of dollars more to live in your home every month, but by the time you pay off your mortgage it could cost you hundreds of thousands of dollars more. That's because each month you pay your mortgage, more money is sent to the bank to pay interest than to actually owning your home. You're simply paying a fee.

Whether you need a mortgage for bad credit to purchase a new home, refinance your current home, or buy a second home, you'll end up paying more with these plans - and not just in mortgage payments. Because of your bad credit, your closing costs could be higher and you may end up paying private mortgage insurance (PMI), which is nothing more than a fee because of your bad credit score.

This can all be entirely eliminated by simply planning 30 - 90 days before you purchase your home. By putting a little effort in restoring your credit, you can erase any worries about getting approved for a mortgage. In doing so you'll save thousands of dollars in the process and reduce your closing costs.

Take the first and easiest step in repairing your credit right now. Get your credit fix in less than 45 seconds and watch your future start to change today. Discover how to rebuild credit

Article Source: http://EzineArticles.com/?expert=Ryan_J._Taylor

Back To Insurance Contents

Back To General Contents ( Home )

Back To The Top

Update Oct. 08, 2009 All About Mortgage Insurance Information By Insurance Experts

2009-10-08T05:33:00.000-07:00

Mortgage Life Insurance Protection - Is it Worth It?
By John Preest

It is a common fact that the odds of developing a critical illness are moderately great. The statistics show that there is a 1 in 6 possibility for men and 1 in 5 possibility for women that an infirmity will impede them from working. At present, mortgage insurance life cover will not change the actuality that you can contract an sickness, yet, it can simply take away the extra tribulations, which are likely to arise such as finance repayments etc.

The bulk of populace will have a mortgage insurance protection policy, other people will maintain they have the top; most comprehensive and expensive policy there is available from the market place, with full terminal sickness protection incorporated. That is all good and fine, but none of this will consist of a critical illness problem. This is where most people fail, as they simply do not distinguish the variation. A incurable illness document is when your GP lets you appreciate that you have a ceiling of 12 months to survive, whilst a critical illness certificate can last years devoid of a prediction on your life expectancy such as loss of sight, deafness or heart etc.

However, its not only the mystification why lots of people don't own a critical ill certificate, further reasons consist of the cost of critical illness life policy premiums. Yes it is more costly, but it's a not rocket science that there is a a good deal advanced possibility of you catching an sickness than dying ahead of retirement age. On the other hand, your critical illness policy and life insurance contracts will work out cheaper, in actuality now and then it can be that much cheaper, the life cover portion is almost totally free.

So to conclude, don't bother leaving out any particulars and don't forget to read the assurance book stipulations and circumstances. It is not such a hard procedure to do, and im certain loads of people regret not doing it.

J P Financial are a mortgage insurance protection brokers based in the UK. Providing mortgage insurance and critical illness life cover quotes

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

Mortgage Insurance Explained
By Jason Hulott

Getting a mortgage is bad enough – what with terms like fixed rate, discount, variable etc – so mention mortgage insurance and naturally your eyes will start to glaze over.

However, mortgage insurance is an extremely important insurance to have – in fact, it can the difference between keeping a roof over your head or ending up having your home repossessed.

If you recently took out a mortgage, you may remember the lender asking you whether you wanted mortgage payment protection insurance. It probably sounded expensive and unnecessary. And while, in some cases, there are companies who like to charge you too much for the product, it doesn’t have to be that way.

As for it being unnecessary – get the right policy and at the right price and it will be an invaluable safety net for you. So, what is mortgage insurance? It is a product whereby should you be unable to meet your mortgage repayments due to being made involuntarily redundant or due to being able to work because of sickness or maybe an accident – then it will cover your mortgage repayments.

Your mortgage repayments (and sometimes other mortgage related outgoings too) will be covered for up to a set period of time (typically 12 months but this can vary from provider to provider) to give you enough time to find another job, or get well etc.

Many people may think that mortgage payment protection insurance is a waste of money, using the old adage “It’ll never happen to me”. However, this is not true. Being unable to work – and therefore having to struggle on state benefits – due to involuntary redundancy, accident or sickness can happen to anyone. It does not discriminate and can strike anyone at any time.

Therefore, if you are in full time employment for more than 16 hours a week and you have a mortgage, then taking out insurance against the financial ramifications makes sound sense.

Despite what the press says, it doesn’t have to be expensive to take out this kind of insurance, and nor do you have to take out a policy with your current mortgage lender. This means you are free to shop around to get a policy that offers you comprehensive protection without a high price tag!

If you are looking for mortgage protection insurance, then do not automatically accept the first quotation you get – premiums can vary wildly, as can the terms of the policy and the benefits.

Do your research – the internet is a quick and easy way to compare policies – and then make a decision from there.

Jason Hulott is Business Development Director of Protection Insurance. Protection Insurance is an internet based insurance business dedicated to getting consumers the very best insurance rates and the best products. Our product portfolio includes Mortgage Insurance

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

Mortgage Insurance Cover to Fall Back On
By Simon Lance Burgess

Everyone who has the commitment of a mortgage should give some thought to taking out mortgage insurance cover. Without having a policy to fall back on you could find yourself in a great deal of trouble when it came to keeping up with the repayments. If you cannot pay your mortgage then you could find yourself being taken to court by the lender and having to leave your home due to repossession.

With a policy you would pay your monthly premium and for this you would be able to rely on an income each month given by the provider and which would be tax-free. This income would be the amount that you insured against when taking out your policy which is up to a certain amount of your monthly mortgage repayment.

With the payment you receive from your policy each month you are then able to keep up with your mortgage outgoings to ensure that you would not be at risk of losing your home. This is essential because even just one missed payment would see the lender sending you a letter and you having to contact them to make an agreement to catch up. Of course this would be extremely hard without having an income to rely on and could be the downward spiral to repossession. Mortgage payment protection insurance would mean that you could avoid all of this and would be free to concentrate on making a recovery or of finding work again which was suitable.

When you look into taking out mortgage insurance cover you have to find out as much as possible about the cover as you can. All payment protection specialists will put different terms in the cover and you have to compare these so you will know if you would be eligible to claim. Exclusions have to be checked and some policies will contain more than others. You also have to check when cover would begin and end as this varies too. Also look for the provider offering to backdate a policy to the first day of you becoming unemployed or when you became incapacitated.

Usually policies will begin to payout your income from somewhere between day 30 and 90 of continuous unemployment or incapacity. Once the policy starts to pay it will do so for a certain length of time and then it stops. You are able to take out cover that would provide you with an income each month for 12 months or 24 months.

Mortgage insurance cover is worth paying out the small premium that a standalone specialist will charge each month and is a much more reliable plan than using savings or claiming for State benefits. You might not have enough savings to last unable to work or are unemployed for any length of time. You also might not be eligible to claim from the State as you have to meet many requirements. Even if you do get State benefits you would only be provided with help towards the interest part of your mortgage repayment and then only up to so much of it.

Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of mortgage insurance cover.

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

Back To Insurance Contents

Back To General Contents ( Home )

Back To The Top

Update August 30, 2009 All About Mortgage Insurance Information By Insurance Experts

2009-08-30T05:20:00.000-07:00

Private Mortgage Insurance - What You Should Know
By Frampton Martin

If you are not able to make at least 20% down payment on your home, then you'll have to purchase a Private Mortgage Insurance policy. It is commonly referred to as PMI. It protects the mortgage lender if the borrower defaults on loan repayment. PMI is usually based on a percentage of your mortgage loan that you need to pay every month. Therefore, it varies with your credit risk and the amount of your home loan.

Types of Private Mortgage Insurance

Private Mortgage Insurance policies can be categorized into 2 types - (1) Borrower-paid PMI and (2) Lender-paid PMI. Each of the 2 types is discussed below.

1. Borrower-paid Private Mortgage Insurance: It is a type of Private Mortgage Insurance policy wherein the borrower pays the insurance premium. Generally, a mortgage borrower needs to purchase this policy when he/she is unable to afford 20% down payment on a home loan. It is also referred to as Borrower-paid Private Mortgage Insurance (BPMI) or Traditional Mortgage Insurance.

2. Lender-paid Private Mortgage Insurance: In Lender-paid PMI (LPMI), though the lender pays the premium cost of PMI, yet ultimately, the borrower has to bear the premium cost. Usually, lenders add the premium cost with the mortgage loan interest. Generally, a lender buys this insurance policy in case of high loan-to-value mortgage.

How to avoid Private Mortgage Insurance

You can avoid PMI even if you're unable to make 20% down payment on your home. Here are some ways following which you can avoid purchasing a PMI policy.

Go for an 80-10-10 home loan: In this loan program, you'll have to take out 2 loans along with paying 10% down payment on your home. The first mortgage finances 80% of the sale price and the second mortgage finances the remaining 10%. It is also referred to as piggyback loan.

However, it may not be possible for you to take out a piggyback loan in present times. Lenders are not offering this loan due to credit crunch that started in 2007.

Pay more interest on your mortgage: You can avoid PMI by paying more interest on your mortgage loan. Most of the times, the lenders waive off PMI if the borrowers pays more interest on the home loan.

Borrow from your friends/family members: You can borrow the required amount from your friends or family members. It is advisable that you mention the terms and conditions of repayment in writing so as to avoid any misunderstanding in future.

When you purchase Private Mortgage Insurance, it is quite important that you cancel it once you've repaid 20% of your home loan so that you only have 80% loan on your home. However, it may take a much longer time as most of your initial payments go towards the interest; you cannot pay much towards your principle in the initial period of the loan term. Most lenders allow borrowers to cancel PMI after 2 years of on time payments.

Bio: Frampton Martin is one of the financial writers associated with the http://www.Homebuilder-guide.com With his in-depth knowledge and vast experience, he has been able to leave a mark in writing and advising on all Home-buying issues and related issues of Private Mortgage Insurance. His remarkable guidance and support has improved the website into a global hub for the home buyers.

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

Back To Insurance Contents

Back To General Contents ( Home )

Back To The Top

Update August 10, 2009 All About Mortgage Insurance Information By Insurance Experts

2009-08-10T07:59:00.000-07:00

80-20 Combined Mortgage and Second Mortgage?
By Jess Peterson

80/20 home loans are combined loans which provide the necessary funds to purchase a property and though at the beginning they may seem more expensive due to higher initial monthly payments, in the long run they will make you save a lot of money due to the lack of Private Insurance Mortgage Payments that they imply.

First: A Few Concepts

80/20 Mortgage loans are actually two different loans combined into a single financial product. In order to understand how this work, you need to have an idea about several loan concepts including: Mortgage Loan, Home Equity Loan, Private Mortgage Insurance, Down Payment, Collateral, etc.

It is not the purpose of this article to explain all the above concepts thoroughly, but we will give a clear idea of them so you can understand how 80/20 mortgage loans work and how you can take advantage of these loans in order to avoid having to pay the private mortgage insurance premium monthly payments and thus save thousands of dollars.

With a mortgage loan, the real estate property guarantees the repayment of the loan. In the event of default, the lender has the legal right to repossess the property and force its sell in order to claim his money. Home equity loans or second mortgages use the same property as collateral too. But they only use the remaining value of the property that exceeds the amount of debt that is being secured on the mortgage loan. This amount is known as equity.

When a mortgage loan finances more than 80% of the purchase or market value of a property, an insurance is required in order to obtain approval. This insurance is called private mortgage insurance and is meant to protect the lender in the event of the borrower defaulting on the loan. The premium of these insurances is rather high and it’s included in the monthly payments of the loan that are paid by the borrower.

80/20 Mortgage Loans: The Solution

The only way of avoiding payment of Private Mortgage Insurance is to put money down when purchasing the property. This implies requesting less than 80% of the property’s value. Thus, a down payment of at least 20% of the property’s value can free you from having to face the private mortgage insurance expensive payments every month.

80/20 Mortgage loans come to solve this problem. These loans are actually a combination of financial products and not a single loan. You get a mortgage loan with an amount equivalent to 80% of the property’s value, and a home equity loan that covers for the rest of the money needed to purchase the property. With this procedure, you get all the money you need in order to buy the asset without having to pay for the private insurance mortgage premium.

---

Jessica Peterson writes finance articles for Yourloanservices.com where she shares her knowledge about how to get money for a starting-up business, consolidating any kind of debt, repairing a home even with a bad credit history and more.

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

Mortgage Refinancing: Avoid Paying Private Mortgage Insurance
By Louie Latour

If you were required to purchase Private Mortgage Insurance (PMI) when buying your home, your financial situation may have changed enough that mortgage refinancing will allow you to stop paying this expense. Mortgage Refinancing has the advantage of giving you lower monthly payments and better terms on the new loan. Here are several tips to help you decide if mortgage refinancing is right for you.

Mortgage lenders require borrowers to purchase Private Mortgage Insurance to protect themselves from certain losses due to foreclosure. PMI does absolutely nothing for the homeowner but drive up your monthly payments, sometimes hundreds of dollars per month. When you finance more than 80% of the value of your home, most lenders require Private Mortgage Insurance. If the value of your home has gone up, you could drop your PMI early with mortgage refinancing. A new appraisal prior to refinancing the loan will tell you exactly how much equity you’ve built in your home and is well worth the expense if it allows you to stop paying PMI.

Even if you do not have sufficient equity to avoid PMI with a traditional mortgage lender you can still avoid it by using a piggyback loan when mortgage refinancing. Piggyback loans are also called 80/20 loans and are actually two loans, often from two different lenders. The first loan is for 80% of the total loan value and the remaining 20% is the piggyback loan making up the difference. Piggyback loans come with slightly higher interest rates because the second lender assumes more risk; however, this expense will cost you much less than if you were paying Private Mortgage Insurance.

You can learn more about your mortgage refinancing options, including common mistakes to avoid by registering for a free mortgage guidebook.

To get your free mortgage guidebook visit RefiAdvisor.com using the link below.

Louie Latour specializes in showing homeowners how to avoid costly mortgage mistakes and predatory lenders. For a free copy of "Mortgage Refinancing - What You Need to Know," which teaches strategies to find the best mortgage and save thousands of dollars in the process, visit Refiadvisor.com.

Claim your free mortgage refinance information guide today at: http://www.refiadvisor.com

Mortgage Refinance Information

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

All About Mortgage Insurance Information By Insurance Experts

2009-08-02T08:29:00.000-07:00

I. 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)

II. Disability mortgage insurance as defined as an insurance policy that will your monthly mortgage payment over period ( normally 12 months) indicated in the policy, if you are disable while the policy is in forced.

III. Unemployment mortgage insurance as defined as an insurance policy that will your monthly mortgage payment over period ( normally 12 months) indicated in the policy, if you are unemployed while the policy is in forced.

Home Owners Insurance Vs Private Mortgage Insurance (PMI)
By Feseha George

Each mortgage payment includes 5 items. It is called "PITI + PMI". "P" stands for payment that reduces the Principal loan balance (This goes towards your equity ). "I" stands for Interest that you pay to the lender for lending you the money to buy the house. "T" stands for Taxes to the county. "I" Stands for the Home owners Insurance. Finally, "PMI" stands for Private Mortgage Insurance.

Homeowners Insurance is a must if there is a mortgage on your house. It's the only financial protection for the policy holder's largest asset. It protects your home, your belongings inside and any losses due to a disaster. It's your personal liability that protects you...not the bank.

For example, if your house is damaged or destroyed, or if your valuables are stolen, you contact the insurance company and they will send out an appraiser who will assess the damage and provide you with an estimate of the cost to repair. If the loss is due to theft or vandalism, the appraiser will need a detailed list of the items stolen or damaged, their value and police reports filed due to the theft or vandalism.

On the other hand, Private Mortgage Insurance is extra insurance lenders require from most home buyers who obtain loans that are more than 80 percent of the homes value. Normally, buyers with less than 20 percent down on a home are required to pay PMI.

In the mortgage business, it protects the lender against loss if the borrower defaults on the loan and by enabling borrowers with less cash to have greater access to home ownership. Meaning, you can buy a home with a three to five percent down payment without waiting years to save up a large sum of money. However, if the lender is unable to recover costs after foreclosure and sale of the property, they receive 15 percent of what you did not pay at closing.

http://www.amerimort.com

http://www.HoustonFHA.com

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

Unemployment Mortgage Insurance Defined
By Marilyn Katz

In my area, whenever somebody closes on a home mortgage, or even when they refinance, they usually get lots of offers for a product called mortgage insurance. People do not always understand this offer, and it is important to look at the various products that might cover a home, or a home mortgage.

Mortgage life insurance is the product that is usually presented on postcards and letters that offer to cover a mortgage in case the owner dies. Sometimes the offer also states that the owner can be covered in case of a disability or critical illness, and that their are options to cover the policy in case of unemployment. Well, this is really a term life insurance policy that has a face value set to cover the balance owed. Riders, or additional terms, can provide cash during a critical illness or disability. The unemployment rider usually only pays the premium during a job loss, but does not cover the home payments.

One of the most popular things about mortgage life insurance is the cash back option. This is called Return of Premium, and it means the insured person will have all premiums refunded at the end of the policy term if they survive the policy. This can be a great option because it provides a cash benefit if the insured person dies, and it returns all of the premiums if the insured person survives.

However, it is more likely that a homeowner will become unemployed than pass away. In fact most of us will suffer a job loss a time or two during our working lives. Another product, alltogether, is unemployment mortgage protection. It is also called job loss protection or layoff protection, because a person does not have to own a home in order to collect the cash benefit. The terms of collecting the benefit are clearly stated, and in general, they follow the sort of rules that state unemployment benefits follow.

But state unemployment benefits are usually not enough to keep a mortgage paid, credit cards paid, and to put food on the table. So this product offers extra cash, from $1,000 - $2,000, which gives a homeowner extra security during a layoff. These products have been very popular in the UK, but are just being introduced in the US market.

Of course, some people will also associate mortgage insurance with the type of credit protection that lenders sell, and some may require. However these plans pay the lender, and not the insured person or beneficiaries. So they are designed to protect the loan company, and not to protect the consumer.

Of course, most homeowners will also need homeowners insurance. These insurance policies cover the property, and not the insured person's life or income. They cover a home and property against damage or liability. If a homeowner carries a mortgage, the lender will probably require homeowners insurance. Even if the mortgage is paid off, it is probably prudent to have a home covered. If your home is damaged, or if somebody is hurt on your property, you will have an insurance company behind you.

We can answer your questions about unemployment mortgage protection online!

We can also give you competitive term life insurance quotes.

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

Private Mortgage Insurance or PMI
By Mark Nash

Home buyers can be faced with paying Private Mortgage Insurance or PMI if they are putting less than a twenty-percent down payment on their new home. This monthly mortgage insurance remains in effect until the borrower has made principal payments to have twenty-percent equity or appreciation now vests them with at least twenty-percent equity. Some mortgage lenders now offer programs to eliminate PMI. These new programs offer borrowers a first mortgage for eight-percent, and a second mortgage for fifteen percent with a five percent down-payment. This loan is PMI-free.

Here is an example; say a buyer is purchasing a home for $250,000. The buyer could take out a first mortgage for $200,000 or eighty-percent of the purchase price. The buyer can also arrange for a second mortgage of $37,500 which is fifteen=percent of the purchase price. The buyer would then make a five-percent down payment. This is referred to a 80-15-5 program. In this situation the buyer would not be required by the mortgage lender to take out Private Mortgage Insurance, which would run about $100 dollars a month.

An additional advantage of the 80-15-5 program is that the mortgage interest on the second mortgage is tax deductible. PMI insurance premiums is not deductible, but legislation has been introduced to allow PMI to deductible as well.

Mark Nash is the author of "Fundamentals of Marketing for the Real Estate Professional", "Starting & Succeeding in Real Estate", "Reaching Out: The Financial Power of Niche Marketing", and "1001 Tips for Buying and Selling a Home". Mark is a contributing writer for: Realtor (R) Magazine Online, Broker Agent News, Real Estate Executive Magazine, Principal Broker, and Realty Times. He contributes residential real estate analysis to Business Week, CBS The Early Show, CNN, HGTVpro.com, The New York Times, and USA Today.

View his books at http://www.1001RealEstateTips.com.

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

Private Mortgage Insurance Deductibility Rules Murky
By Mark Nash

Recent legislation signed into law allowing some tax deductions on Private Mortgage Insurance (PMI) premiums by homebuyers is filled with more questions than answers as of this writing. As with any tax questions, seek out an experienced tax professional. Many in the mortgage industry were caught off guard by this new tax law. Depending on many variables in the legislation, do not take for granted any advice on deductibility from those who do not have a thorough understanding of the short and long term implications of this legislation.

What we do know:

-Borrower-Paid Private Mortgage Insurance for eligible borrowers who have mortgage loans funded after January 1, 2007 might be able to utilize the new legislation.

-At this time, only eligible purchases qualify. It is still unclear if refinances and rehabilitation loans fall under this legislation.

-Early interpretations by those in mortgage industry believe the legislation covers conventional and FHA financing.

-The legislation limits the full deductibility to borrowers with an adjusted gross income (AGI) of $100,000 or less. In the case of a married individual filing a separate return, the AGI maximum is $50,000. The deduction in gradually phased out for borrowers with AGI’s up to $109,000. Contact a tax professional concerning your own situation.

-The current legislation specifically states that unless the legislation is extended, it will expire on December 31, 2007.

-Taxpayers who wish to utilize this new legislation must itemize on their tax return to receive the benefit.

-Deductibility issues are between the borrower and the Internal Revenue Service. Mortgage loan originators will be reluctant to provide individual tax advice on this new legislation. Borrowers should seek out qualified tax consultants for advice.

Mark Nash is the author of five real estate books, new for 2007; Real Estate A-Z for Buying & Selling a Home. William J. Sittig, Chief of the Science, Technology and Business Division of The Library of Congress has invited Mark to make a presentation on 1001 Tips for Buying and Selling a Home to the members, public and staff of the Library on March 21, 2007. Nash has been featured on Bloomberg Video-on-Demand, CBS The Early Show, CNN, and The Today Show. He is a syndicated columnist for RealtyTimes.com and reviews books for MyShelf.com and The Midwest Review of Books.To subscribe to his free monthly ezine; Agent to Agent visit: http://www.AgenttoAgentezine.com.

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

Back To Insurance Contents

Back To General Contents ( Home )

Back To The Top

All About Mortgage Insurance Information By Insurance Experts

2009-08-02T08:27:00.000-07:00

Mortgage Insurance Rates
By Jennifer Bailey

In order to secure themselves against potential default of mortgages, mortgage sellers adopt the policy of buying insurance policies. These insurance policies are mandatory for those mortgages in which there has been a down payment of less than 20%. The premiums over these mortgage insurance are generally passed on to the buyer of the mortgage, who pays it along with the monthly payments towards the mortgage. Such mortgages are also called BPMI, or Borrower Paid Mortgage Insurance. There is also another kind of mortgage insurance – the LPMI, or Lender Paid Mortgage Insurance. The conventional pattern is to go in for a BPMI.

Rates of mortgage insurance vary according to current situations. As in mortgages, the rates of the insurance also may be either fixed or adjustable. Fixed-rate mortgage insurance is constant for the entire life of the mortgage, while adjustable-rate mortgage insurance varies according to market fluctuations in rates.

Mortgage insurance rates also differ depending on whether they are BPMI or LPMI. There is not much difference in the numbers; the difference lies in who pays the premiums of the mortgage. In addition to all these factors, mortgage insurance rates also depend on the amount of mortgage coverage that the insurance provides. A greater coverage would be levied at a lower rate of insurance.

It is not easy to mention the rates individually, as there are a wide number of factors and statistics involved and they vary from day to day. However, any mortgage insurance company would be more than pleased to give a current list of the insurance rates if asked. It is highly necessary to know the current mortgage insurance rates while buying a mortgage, as typically it would be the borrower who would have to pay for it. Most borrowers neglect to ask the mortgage rates from their mortgage sellers, or they are simply misinformed. These are the people who later find themselves stuck in a rut of high monthly payments.

Mortgage Insurance provides detailed information on Mortgage Insurance, Mortgage Insurance Calculators, Mortgage Insurance Leads, Mortgage Insurance Rates and more. Mortgage Insurance is affiliated with Mortgage Life Insurance Quotes.

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

Mortgage Insurance - Find the Best Policy Get a Cheap Quote
By Bryan Burbank

Today it is hard to watch television or read the newspaper and not know that we are having a mortgage crisis. Even though most of us never plan on defaulting on a mortgage there can be many reasons this can happen. A loss of employment, sudden death of the primary provider in the family or a catastrophic injury. These are some good reasons to have mortgage insurance. This insurance provides a sense of security to the lender to counter the risk that the homeowner may default on the mortgage.

Mortgage insurance is a partnership between your lender and the insurance company in which they both share the overall risk. If you as the borrower can not pay back the loan then both companies have some form of protection. As you search for this type of insurance you must be clear and understand the difference between mortgage insurance and homeowners life insurance. Each one of these has a different and specific purpose.

Mortgage life insurance protects the borrower and his or hers family not the lender or the insurance company. In the event of an untimely death of the primary policy holder the family know has the funds to pay off the loan freeing them from the financial burden this can cause.

Homeowners mortgage is also beneficial to the home buyer because the insurance company assumes the risk. This makes it much easier for the borrower to get a loan now that the homeowners insurance company is assuming the risk and it may even allow you to put down a smaller down payment.

If you are the owner of multiple homes mortgage insurance will allow you to provide less money for down payments. You may be able to qualify for certain tax breaks since you can deduct the amount of interest rate that you pay to the lender when it is tax time.

Some feel that it can be a negative to have mortgage insurance because you will have to pay more costly insurance premiums and annuals. Only you as the buyer can weigh the pros and cons of mortgage insurance and see if it the correct move for you. I feel in the end that the benefits out weigh the cost and it could be the right decision for you.

Learn how to find: Discount Mortgage Insurance

Get some Advice about: Types of Insurance

Bryan Burbank is an expert in the field of Discount Insurance.

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

Mortgage Insurance Calculators
By Jennifer Bailey

Mortgage insurance calculators are used to calculate different aspects relating to mortgage insurance. They can calculate the length of time for which a person will have to keep making insurance payments on his or her mortgage. This period is displayed in number of months.

Mortgage companies secure their sold mortgages by taking an insurance policy on them. The premiums of this insurance policy are passed on to the people who have bought the mortgage, and are bundled into their monthly payments. The insurance premiums may not run for the entire duration of the mortgage. Mortgage insurance calculators help to determine how long the mortgagor will have to continue insurance payments on the mortgage.

This calculation is actually a very simple task. There are six important figures that are required to be inputted into the calculator – the current property value, the value of the property at the time of taking the mortgage, the current interest rate, the current balance amount, the monthly payment and the expected appreciation rate of the property.

A person has to pay insurance on the mortgage until the time the value of the remaining mortgage reaches 78% of the current property value. Each month a payment is made, a portion of it goes toward the principal value of the mortgage. Hence, the mortgage value falls down month after month. Once the residual mortgage value is below 78%, the mortgagor is no longer liable to pay any insurance premiums on it. Alternatively, there are no insurance premium payments to be made after the mortgage balance falls below 80% of the appreciated property value.

Buyers of mortgages may waive insurance premiums in lieu of higher interest rates on their mortgages. But more often than not, this is a tricky decision to make – whether to go for higher interest rates or to settle for paying mortgage premiums. There are special mortgage insurance calculators that can help buyers of mortgages decide this aspect. Such calculators can help to compare the total interest costs over the mortgages and the total portion of payments done towards mortgage insurance premiums.

Free mortgage insurance calculators are available online. Several mortgage-related websites feature simple, easy-to-run programs which can help buyers decide insurance aspects of their mortgages.

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

Back To Insurance Contents

Back To General Contents ( Home )

Back To The Top

All About Mortgage Insurance Information By Insurance Experts

2009-08-02T08:25:00.000-07:00

Mortgage Insurance Cover to Fall Back On
By Simon Lance Burgess

Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of mortgage insurance cover.

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

What is Mortgage Insurance?
By Chris Hallmark

Lender's Mortgage Insurance, also know as Private Mortgage Insurance, (PMI), is required on more and more NJ mortgage loans nowadays. Basically, in a nutshell, it protects the New Jersey mortgage lender. To give it a more professional definition, as defined by Fannie Mae and Freddie Mac, is insurance payable to a lender or trustee for a pool of securities that may be required when taking out a mortgage loan. So, essentially, it protects the mortgage lender if you default on your mortgage loan. There really isn't any more to it than that.

Mortgage Insurance in New Jersey is used to offset the losses a lender faces when the property goes into default, then total foreclosure, then can't recover those losses fromt eh foced sale of the property in a foreclosure aution that takes place in NJ. The annual cost of PMI varies greatly and depends on a number of factors. NJ mortgage loan term, loan type, loan-to-value ratio, and total coverage amount, all factor into exactly what a PMI payment amount will be , on a monthly basis, for some who refinances in NJ or purchases houses in NJ for sale. Basically, anyone who gets a mortgage in the Garden State, likely will pay PMI.

The "catch" to PMI is that it is ONLY required on FHA loans, or conventional loans, when the buyer of NJ homes is putting less than 20% down. PMI may be paid up front on the mortgage loan, or built into the loan through monthly payments, very similar to when you are getting any other type of insurance in New Jersey. If you are putting less than 20% down when buying NJ homes, then the PMI "falls off" of your monthly mortgage payment, when the loan to value (LTV) of your property, gets below the 80% mark, wether it is by paying down the loan, or simply by market appreciation. Please keep in mind, that PMI and Homeowners Insurance, are two TOTALLY different types of insurance!

In the past, a borrower was able to get a second mortgage to avoid paying the PMI, if they did not have the required 20% down payment. Say they had 15% to put down on an NJ home for sale, and they wanted to avoid paying PMI, they would get a "subordinate" mortgage for the other 5%. Nowadays, getting secon mortgages is much harder, and more costly, so buyers of New Jersey homes for sale generally just accept the PMI, knowing that it won't be there forever.

Please visit our website to learn more about New Jersey mortgage programs, and how to avoid paying PMI with other creative strategies!: NJ Mortgage Programs

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

Mortgage Protection - 5 Things You Need to Learn About Mortgage Protection Insurance
By Robert McKnight

Mortgage protection insurance is a relatively new type of insurance that you may not know a lot about. This article will give you a quick overview of some of the most important aspects of this type of coverage.

Mortgage Protection Insurance is Not PMI Insurance

Do not confuse mortgage protection insurance with private mortgage insurance or PMI. PMI is a type of insurance that mortgage lenders require you to obtain if you do not put a down payment of at least 20 percent on your home. PMI protects the lender, not you. Once your principle balance on your home mortgage dips below 80 percent of the appraised value of your home, you can have it removed.

Mortgage Insurance Policies Differ

It depends upon the policy as to what a mortgage protection policy will actually pay. If you get mortgage life insurance, most policies pay off the entire balance of your mortgage in the case of your death. If you have mortgage unemployment insurance, then policies will pay your monthly mortgage payment while you look for another job.

Mortgage disability insurance will pay your monthly mortgage if you become disabled temporarily or permanently. If it is a permanent disability, there will generally be a time limit as to how long you can collect the benefits of the mortgage protection insurance.

These policies will pay an agreed upon amount that correlates to your mortgage payment. It may pay only the principle and interest, or it may pay principle, interest, taxes, and insurance. It depends upon the policy you choose.

MPI Pays a Cash Benefit for a Specified Time Period

Unless you get mortgage life insurance, which pays off the mortgage completely if you die, there will be a limit on the period of time for which you can collect cash benefits. These limits can be anywhere from three months to three years.

Those policies with the longer period of payment will carry with them a higher premium. When choosing the right mortgage protection insurance for you, you should consider what is more important. You may only need help with your mortgage payments for a few months while you hunt for another job. If you become disabled, you may need to have a longer payment period during your recovery.

There is a Waiting Period Before Collecting MPI Benefits

Virtually all mortgage protection insurance policies will require a waiting period before you are able to collect on a claim. Most will not honor a claim against the insurance policy if it is made within the first six months of your policy.

Also, most policies will require that you be unemployed for a certain amount of time before the cash benefit will be paid if you have mortgage unemployment insurance or mortgage disability insurance. This time period is generally anywhere from 30 to 60 days.

Mortgage Protection Insurance May Pay if You Go On Strike

If you are a union worker and your union goes on strike, you may be eligible to collect the benefits of mortgage unemployment insurance. Many policies have this as an option, though not all. If you are a union employee, you should make sure your mortgage protection policy has this as an additional protection against unemployment.

Mortgage protection insurance should not be lightly disregarded in the current economic climate, nor should it be purchased haphazardly. Take the time to learn about this new and possibly helpful type of insurance and get quotes from mortgage protection insurance providers.

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

Back To Insurance Contents

Back To General Contents ( Home )

Back To The Top

All About Mortgage Insurance Information By Insurance Experts

2009-08-02T08:22:00.000-07:00

The Easy Mortgage For Bad Credit Solution
By Ryan J. Taylor

Your mortgage for bad credit options are basically the following:

1. Search for and try to find the best offer with your current credit situation
2. Focus on credit restoration to qualify for preferred treatment

Take the first and easiest step in repairing your credit right now. Get your credit fix in less than 45 seconds and watch your future start to change today. Discover how to rebuild credit

Article Source: http://EzineArticles.com/?expert=Ryan_J._Taylor

Mortgage Life Insurance Vs Unemployment Mortgage Insurance
By Robert McKnight

It seems like every day we hear about the mortgage crash and how hundreds of thousands of people around the nation are losing their homes because they can not pay their mortgages. There are two options which can help you from becoming one of the unfortunate many: Mortgage Life Insurance and Unemployment Mortgage Insurance. Either of these options can secure your mortgage payments so you and your family will not have to worry about meeting these payments in the event that something happens to you or your main income source.

The Difference between Mortgage Life Insurance and Unemployment Mortgage Insurance

Both if these types of insurance have many of the same components, and similar policies and plans which are available to you. They are, however, different in what they cover. Mortgage Life Insurance is a coverage which protects your family from losing their home in the event of your death; while Unemployment Mortgage Insurance covers your mortgage should you lose your job when you are not to blame. For example: if you should be laid of from work because your employer is downsizing, you could qualify for Unemployment Mortgage Insurance.

Benefits of Mortgage Life Insurance

One of the benefits of this type of insurance is you are not required to take a medical examination to qualify for the coverage, which is unlike other life insurance policies. Also, it is a cheaper alternative to your standard life insurance policy. There is also an option called a Return of Premium.

As its name suggests, this optional insurance will return all the premiums you paid back to you if you are still alive when your mortgage is all paid for. Also this coverage may be used as your primary life insurance or as a secondary life insurance. There are other options which can be added to the main policy including: sickness, injury, and loss of work.

Benefits of Unemployment Mortgage Insurance

Unemployment Mortgage Insurance is sometimes referred to as layoff protection, namely because you do not have to own a house to receive any benefits. The conditions for collecting any benefits are similar to that of the state unemployment coverage. But since the state coverage is less than $400 per week, most people need a little extra to help them make ends meet.

One of the optional additions to a Job Loss Protection Insurance policy is accident, sickness, and unemployment coverage. This comprehensive coverage will cover almost anything that could happen to you so that your mortgage payments could still be met.

Mortgage Life Insurance is a component of Unemployed Mortgage Insurance; you can get it as an addition to your unemployed coverage. With this option you can have both of these protective coverages on your house at the same time without having to get two different policies. It is easy to get an insurance policy that is designed to cover your mortgage payments. Now that the economy is unstable and jobs are harder to find and keep, it is the perfect time to protect yourself and your family.

Find and compare both Mortgage Life Insurance options and Mortgage Unemployment Insurance options at http://www.mortgageprotectionhelper.com today!

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

Unemployment Mortgage Protection Insurance Guide
By Robert McKnight

With daily news reports focusing on the declining economy and disappearing jobs, you may be like many who are beginning to wonder what you would do if you were suddenly unemployed. How would you pay your mortgage and other expenses? Is there a way to protect yourself and your family? One answer to both of these questions could be unemployment mortgage protection insurance.

What is Unemployment Mortgage Protection Insurance?

This is a relatively new line of insurance that protects your mortgage in case you become unemployed for an extended period of time.

You will pay a relatively small monthly premium and if you become unemployed for more than 30 days and the unemployment is due to no fault of your own, you will receive a cash benefit. The cash benefit will be paid directly to you on a monthly basis in the amount that was agreed upon in your contract. You can then use the funds to pay whatever bills you wish.

Who Needs This Type of Insurance Coverage?

Virtually anyone who has a mortgage could use the protection of this type of insurance. Very few people can manage to pay their mortgage and other expenses if they are unemployed for an extended period of time. That is how savings accounts are emptied and bankruptcies and foreclosures happen occur.

If you don't think you could financially withstand unemployment for more than 30 to 60 days, you should seriously consider investigating this type of coverage.

How Affordable is This Coverage?

Luckily, this form of insurance is one of the more affordable lines of insurance. An average monthly premium of $70 to $75 will protect a mortgage payment of about $1500. This means your yearly premium for unemployment insurance will be just over half of one month's mortgage payment.

Where to Shop for Coverage Options?

It is getting easier and easier to find unemployment mortgage protection insurance. Your mortgage lender is a likely source, but you can also find unemployment insurance online. An online search will allow you to gather quotes conveniently and quickly. This will allow you to compare unemployment protection insurance providers and get the best deal for you.

Are There Restrictions on the Coverage?

There are some restrictions put upon the payout of an unemployment protection insurance claim. Though unemployment mortgage protection insurance companies will have differing restrictions, here are a few of the most common.

Job loss must occur through no fault of your own
Must be full-time, year-round employee
Must be unemployed for at least 30 days
Must have unemployment insurance policy for at least 6 months
No self-employed workers

Make sure to read all the terms and conditions of an insurance policy before signing.

The unemployment statistics are staggering as nearly one million jobs were lost in the months of October and November of 2008. Projections for 2009 expect this trend to continue with over two million jobs to be lost in 2009. Now is the time to consider protection for your home and family with unemployment mortgage protection insurance. It may not be the right choice for everyone, but it may be the right choice for you.

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

Understanding Mortgage Insurance
By Frank Rodriguez

Buying a home often means you're going to run into a lot of terms you won't be familiar with. One of these might well be PMI, which stands for private mortgage insurance. Though it is still relatively unknown, more and more people are realizing this option in making down payments.

For many people, having to pay something like twenty percent of the cost of a home right away just isn't a possibility. This is the point where they should turn to mortgage insurance. They'll have to pay a lot less in terms of this initial expense, and sometimes even nothing at all, which has helped bring it more into light. It's 0
down payment requirements have the expensive affordable for the first time home buyer.

Obviously, the economy is in a lot of trouble now, which means that the number of people who won't be able to make down payments is just going to grow. Considering how much you'd have to pay on a $400,000 home, you can't blame anyone for trying to find something that will help.

With everything there is to consider, even a minor issue with money could prevent you from reaching your goals. Yet, with mortgage insurance, things suddenly become much easier. You can pay it off in monthly payments, put into your escrow, like you would with your mortgage, until you are paid off or able to cancel.

Part of the reason you haven't heard of this option is that it is a relatively new one inspired in part by the economy. Yet just because it isn't much discussed, this doesn't mean you shouldn't use it. In fact, many of the people who ignore it are just the type who would probably need it most.

There is the fact that this will get more people involved with your money than you would probably prefer. But this isn't going to be much of a concern when it comes to getting a house or not. You'll find that the aid you get is well worth having a new place to live that will last for years.

If you happen to be a first time home buyer you probably don't have the necessary cash to avoid the dreaded mortgage insurance. All is not lost though, as PMI insurance allows you to get into home ownership.

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

Back To Insurance Contents

Back To General Contents ( Home )

Back To The Top

All About Mortgage Insurance Information By Insurance Experts

2009-08-02T08:05:00.000-07:00

Learn What Private Mortgage Insurance Is
By Frank Rodriguez

If you're looking at buying a home, you may have heard the mysterious acronym PMI being thrown around, never realizing what it stood for. It stands for private mortgage insurance, which is quickly becoming a favorite option among many people who might struggle making a down payment.

A down payment is usually around twenty percent, but not everyone will have this much to spend up front. In that case, PMI can be used in place of the full funds. This is regardless of apllying for a fixed or adjustable rate mortgage. It might even manage to stand in completely for the payment, for people not to have to spend anything at all. Needless to say, it might well stick around.

Part of the reason for this is that with the current state of the economy, there are more and more people wanting a house, but not knowing where they're going to get the money. If you're looking at a $200,000 home but aren't in a great position financially, you might have a hard time buying it.

Yet when you take advantage of private mortgage insurance, it could be very little time before all of this is taken care of. You will have to make monthly payments, at the same time as your mortgage payments, but these will be easier to take on. You'll put in the funds in escrow until everything is taken care of or you can cancel.

Even with its rising popularity, this is not an option many people are aware of, and so they might not take it even when they need it. To some extent, it is only the recent situation that has brought it to light in the first place. All the same, it might be the best option for you.

You've probably heard that you don't want too many other people getting involved in your finances, and this is true to some extent. But under special circumstances, you need to take whatever actions will work for you, and this can end up doing a lot of good so you can have your new home.

To find more detail as it relates to private mortgage insurance and whether you'll need it you can find more adjustable rate mortgage information at the aforementioned site.

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

Unemployment Mortgage Insurance Vs Disability Or Death Mortgage Insurance
By Robert McKnight

Many questions exist about the different lines of mortgage protection insurance. Because of the growing number of home foreclosures and high unemployment, you are searching for more information about this type of insurance. Many wonder about the differences between the different types of mortgage protection insurance and which one is the best for them.

The real question many face is should you get unemployment mortgage insurance, disability or death mortgage insurance.

Unemployment Mortgage Insurance Explained

Unemployment mortgage insurance is for those who simply want protection in the event they lose their job. If you lose your job through no fault of your own, the mortgage unemployment insurance provider will pay you a cash benefit while you search for a new job.

The recent unemployment crisis in the U.S. has many people worried about the security of their job. You would not be crazy to be worried, nor would you be crazy to consider this type of mortgage protection insurance. While this type of insurance can be valuable to anyone who is the breadwinner for a family, it is suited more for the younger worker who needs the extra protection.

Disability Mortgage Insurance Explained

This type of insurance is designed to protect those who lose their job due to disability and are no longer able to pay their monthly mortgage. This can be a short-term disability or permanent disability. However, if you become permanently disabled, your disability insurance will only pay for a specified period of time. It depends on the policy how long that will be, though the more expensive policies will generally cover you for about three years worth of mortgage payments.

Disability mortgage insurance is very similar to other forms of mortgage insurance in that it covers your monthly mortgage payments due to a loss of employment. In fact, some unemployment mortgage policies will allow you to add disability coverage as a reason for unemployment and roll both into the same policy.

An accident or any other reason can result in your disability at any time, but as you age, the likelihood of becoming disabled increases. Because of this, disability insurance is generally more beneficial to older workers where the risk is higher.

Death Mortgage Insurance Explained

Death mortgage insurance is a little different from other forms of protection insurance. Death insurance will pay the entirety of your mortgage in the case of your death. It is designed to lessen the burden of your family and allow them to keep the home you have provided for them.

Similar to disability insurance, it can be beneficial to a worker of any age because of the chance of an accident or terminal illness. However, older workers are more likely to purchase this type of insurance because of the higher risk. You should consider that younger workers with families who have not yet built up their savings and investments are the prime beneficiaries of this type of protection in the case of an accident.

All three of these types of mortgage protection insurance can be beneficial to you if you want to add protection for your largest personal investment. You should examine your own situation to decide which type of coverage is best for you. Keep in mind though, unemployment insurance, disability mortgage insurance, and death mortgage insurance are not mutually exclusive and you can indeed seek complete protection with all three polices from some providers.

Be sure that you take the appropriate measures to protect yourself and your family should the unfortunate and the unforeseen happen. Get started finding mortgage protection insurance today!

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

Mortgage Unemployment Insurance 101
By Robert McKnight

If you have only recently become aware of mortgage unemployment insurance this article will give an overview of the basics. Mortgage unemployment insurance is one type of mortgage protection insurance and is becoming more and more popular for those who are interested in protecting their home from foreclosure due to loss of employment.

Coverage is Easy to Qualify For

Qualifying for this coverage usually requires a year-round, full-time job and a mortgage. Although, most of these insurance providers will not offer you coverage if you are self-employed.

It is Easy to Find a Policy to Suit Your Needs

As the market for this new type of coverage has grown, more providers have sprung up, making it easy to find this type of insurance. You can usually obtain a policy from your mortgage lender or find another provider.

The internet is a great place to search and compare policies. There are lots of reputable providers and you can easily and conveniently compare rates and polices online.

Mortgage Unemployment Insurance is Easy to Understand

In addition, these policies are pretty straight forward and easy to understand. You pay a fairly low monthly premium and if you lose your job through no fault of your own, the policy will pay you a cash benefit based upon your monthly mortgage for a specified period of time or until you gain employment.

There are, however, different policies offered by different mortgage unemployment insurance companies. The differences generally are the following:

* Amount of cash benefit

* Length of unemployment before benefit begins

* Time period of cash payout

* Waiting period before claims can be filed

These are all items in your policy that will be agreed upon when purchasing mortgage unemployment insurance. They can also be used to compare policies and rates.

Easy to Add Additional Coverage Options to Increase Your Protection

In addition to a simple policy, you can also get further protection by extending your policy to include enhancements. Here are some of the more common extensions of a normal protection policy.

* Addition of spouse to policy

* Disability insurance (loss of job through disability)

* Protection for striking workers

All of these additional protections will add to the cost of your premiums, but they can certainly come in handy in specific situations.

While mortgage unemployment insurance is one of the simpler forms of insurance, it still requires some research on your part. In today's rocky economic climate, which includes escalating unemployment rates, this type of protection is becoming a safer bet and nearly a necessity for those who want to protect their home. Get started finding mortgage protection insurance today!

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

FHA Mortgage Insurance
By Justin Narin

The FHA loan insurance program was created to help first-time buyers get into homes. However, first-time buyers usually don't have 20% down payments and may have a spottier credit history. In order to provide protect taxpayers from paying for defaulted FHA mortgages, the loans include mortgage insurance premiums (MIP).

The FHA Mortgage Insurance Premium
FHA mortgage insurance is similar to the private mortgage insurance (PMI) required for conventional mortgages with down payments below 20%, but there are some key differences.

Up-front fees: Unlike the traditional PMI, the FHA MIP includes a 1.5% up-front fee at time of closing. The fee is usually included in the loan, so you pay it over the life of the loan.

Rate: The FHA MIP is also mandated at .5% of the loan amount per year, divided over 12 months. PMI rates are also usually .5% divided over 12 months, but the rates do vary by lender.

Removal: Unlike PMI, the FHA MIP is mandatory for the first five years of loans with terms of more than 15 years, even if your loan balance reaches 78% of the original home value or sales price. PMI premiums can often be removed if the loan balance is below 80% of the current market value. Conventional lenders are required to automatically remove PMI when the loan balance falls to 78% of the original loan amount.

Exceptions: There are some exceptions to the mandated FHA mortgage insurance premium. If you have a loan term of 15 years or less AND put down 10% or more, the MIP will be cancelled when the loan balance is 78% of the original appraised value or original sales price, whichever is less. If you pay 20% down on a 15-year loan, you won't be required to pay the MIP.

How the MIP Affects Your Loan Decision
Most people want to avoid paying mortgage insurance because it adds no value to the home and doesn't go towards the principal. If you don't have a 20% down payment, then you will most likely have to pay it for any loan, whether it's from the FHA or a conventional lender. In that case, carefully compare the costs of each loan.

If you've saved a 20% down payment and have a good credit history, then a conventional mortgage is probably better for you because you won't have to pay PMI
on a 30-year mortgage, as you would with an FHA loan. However, if your down payment is a family loan or gift, you may not qualify for a conventional loan even with 20% down. In that case, an FHA loan with MIP may be your only option. If you can afford the higher payments for a 15-year mortgage, that may be the best option.

FHA Mortgage Insurance Refunds
The FHA and HUD owe mortgage insurance premium refunds to some homeowner who received a loan between September 1, 1983 and January 1, 2001 due to excess earnings from the FHA's Mutual Mortgage Insurance Fund.

You may be eligible for a premium refund if you:

* acquired an FHA loan after September 1, 1983

* paid an up-front mortgage premium at closing

* did not default on your mortgage

You may be eligible for a share of the excess earnings if you:

* acquired your loan before September 1, 1983

* paid your loan for more than seven years

* had your FHA MIP terminated before November 5, 1990

There are also exceptions for loan assumptions, FHA to FHA refinances, insurance claims by a mortgage company, and the statute of limitations.

In most cases, you would have been notified of the refund when HUD received notification that the FHA MIP on your loan was terminated. You would then be sent a check or an application. If you receive an application, read it carefully, compete it, have it notarized, and return it to HUD with the required proof of ownership.

If you didn't receive a notice within 45 days of paying off your loan, confirm with your lender that they sent notification of MIP termination to HUD. If they did, contact HUD. If you've already applied and didn't receive a response within 120 days, contact HUD. You can reach them by phone or by mail.

Phone: (800) 697-6967, 8:30 a.m. to 8:30 p.m. Eastern Standard Time, Monday through Friday.

Mail: U.S. Department of Housing and Urban Development, P.O. Box 23699, Washington, DC 20026-3699.

Note: All inquiries should include your name, your FHA case number, the date that the mortgage was paid-in-full, the property address, and your daytime phone number.

Mortgage insurance is considered a burden by man, but if it's the only thing standing between you and homeownership, it's a burden worth bearing. For more articles on FHA Mortgage Insurance, visit: http://www.bills.com/fha-mortgage-insurance/

Justin has 5 years of experience as a financial adviser; his key areas are loan consolidation, debt relief, mortgages etc. For more free articles and advice visit http://www.Bills.com

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

Back To Insurance Contents

Back To General Contents ( Home )

Back To The Top