Home mortgage insurance is typically a voluntary proposition that warrants consideration. It is a necessary cost assessment that you will have to evaluate. You can either opt in or opt out of the coverage. This type of insurance coverage operates very similar to a life insurance policy. In the event that you become unemployed, disabled or have an untimely death, the policy begins to immediately pay your mortgage.
Therefore, you or your survivors would not have any responsibility of paying on the mortgage. Another benefit to this type of coverage is that since the lender is protected under the policy they are more willing to grant a lower down payment. In some cases it is even possible to purchase a home with no down payment at all.
Many homeowners fail to consider home mortgage insurance. Why should you consider home mortgage insurance? Given the current economic climate, today job losses are prevalent and the risk of an unforeseen injury or disability has many homeowners into foreclosure. Home mortgage insurance is a way to provide coverage and secure the lender in the event of default on your home. Purchasing this type of coverage will protect your home in the event of unforeseen circumstances.
Recent insurance industry studies indicate that the average worker has a 27-31 percent possibility of being disabled for a period of 90 days or greater. The need for home mortgage insurance becomes even greater when you consider that studies also demonstrate that the lengths of disabilities are increasing. For a worker in today’s economy, proper planning requires home mortgage insurance to prevent foreclosure in the event of a disability or other economic loss. Home mortgage insurance will make the payments on your home when they are due.
Things to Consider with Home Mortgage Insurance
Are you engaged in a high-risk occupation? Locate a trustworthy insurance agent. Purchase the maximum coverage that you are capable of affording.
Determine the future costs of your mortgage. For example, do you have a balloon payment that will come due? Or, do you have an adjustable rate mortgage?
Determine what you would receive from existing sources, pensions, retirement benefits and governmental resources.
In considering home mortgage insurance, consider whether a severance package from your employer and other sources of income will be sufficient to pay your mortgage. Your goal is to foresee the potential economical hardship that could be visited on you and your family. Adequate insurance will give you a strong sense of security and protect your loved ones.