Join the Meeting Place for Moms!
Talk to other moms, share advice, and have fun!

(minimum 6 characters)

How does mortgage insurance work?

Any help?

 
Anonymous

Asked by Anonymous at 2:59 PM on Feb. 11, 2009 in Money & Work

This question is closed.
Answers (6)
  • Mortgage Insurance is something you have to pay for to protect the lender in case you default on your loan. Most lenders will require you to pay for it if you are not putting down 20% (not all....some are using this as a selling point...last year BOA didn't require it if your credit score was good enough but I don't know what their policy is now). Once you've paid off 20% of the principal on your loan, you no longer need Mortgage Insurance. People usually just keep paying for it though because they don't want to refinance or don't realize that they can stop.
    ANGIE409

    Answer by ANGIE409 at 4:24 PM on Feb. 11, 2009

  • Do you mean home owners insurance?
    louise2

    Answer by louise2 at 3:01 PM on Feb. 11, 2009

  • If I am not mistaken, mortgage insurance is for high risk loans or people that did not put at least 20% down on their home, You would pay a premium or extra amount with your house payment for a specific amount of time....other that, that is all I know about it.
    midnightmoma

    Answer by midnightmoma at 3:10 PM on Feb. 11, 2009

  • Are you talking about home owners or about private mortgage insurance? PMI is forced onto any loan that is over 80% LTV (loan to value) to protect the lender. This is in addition to your hazard/home owners insurance. You can get out of the PMI by refinance your loan if one of the following has occured; your home value has gone up substancially (requiring an appraisal to determin value) and your loan to value is now under 80% or you have paid enough down on your home that you are under the 80% LTV. (this will also require an appraisal)
    mamakirs

    Answer by mamakirs at 3:31 PM on Feb. 11, 2009

  • oh yeah and You can't just stop paying it as it is calculated into your payment. In some cases it is paid upfront on the loan (in the rate) or in fees.
    mamakirs

    Answer by mamakirs at 4:32 PM on Feb. 11, 2009

  • I thought mortgage insurance was something that if either spouse dies the house is paid for. My friends husband died and her home was paid off.
    Chrissy629

    Answer by Chrissy629 at 8:47 PM on Feb. 11, 2009