Mortgage Protection Insurance – The Essentials
This article goes over the basics of mortgage protection insurance. It's important to understand what this coverage entails, which is why we've provided you with a table of contents to jump ahead to whichever section you need help with. In addition, if you're interested in learning more about this type of insurance we have included links for additional information that will teach it further!
Mortgage Protection Insurance – The Essentials | Mortgage Protection Insurance - Overview
Mortgage Protection Insurance - What Does It Cover?
Mortgage Protection Insurance - Sub-Contractors and Mortgage Protections
Mortgage Protection Insuranc...
Mortgage Protection Insurance - How Much Does It Cost?
Mortgage Protection Insurance - What If You Don't Want It?
Conclusion
The different sections included in this article are pretty basic and should give you a good understanding of the essentials of this type of insurance. If you have any questions or need further information, be sure to let us know!
This is an awesome post and I wish I could have seen it before I bought my house and also after. Thank you for some very helpful information.
I just want to say thank you for your post. I think most of us couldn't have been told these facts.
Sincerely,
Ragan
I have a question about the Mortgage Protection Insurance . Since it is offered in multiples of $25, how is the coverage amount calculated? I would think the coverage would be for the first or second policy purchased. Or am I not thinking correctly? Thanks
There are multiple factors that go into how much protection you will receive. The number of policies purchased also plays a key role in how much protection you are receiving per dollar spent through their website. This information has been provided by our mortgage agent who is licensed to do this here in Massachusetts (http://www.theaclt.com).
As a mortgage broker I have always had to educate my clients on what is available but mostly when they do not know what they are buying. This was very helpful in doing so for those who were in the market for this as well as those who may be. I would like to congratulate you and the Mortgage Protection Insurers on their excellent web site and educational program which includes this most needed information that is easy to understand.I am not an expert on this insurance but I will say that the coverage varies with several variables such as the amount of money being paid back to you for some examples. The company that I work for is a mortgage broker so we work with all of our clients to help them fairly and properly determine how much they can afford to pay each month for their payments. If I may ask, if a client would like to purchase coverage, how would we go about doing so?
Hi I just wanted to ask about mortgage protection. I have a single family home. I have a $200,000 house and have about a $55,000 mortgage and about $50,000 in other debt on my house. Can I get mortgage insurance on my home because of the amount of other debt?
Mortgage Protection Insurance - What Does It Cover?
Mortgage Protection Insurance is a contractual agreement between the homeowner and an insurance company which provides for protection against loss or damage to your primary residence due to fire or lightning (or sometimes earthquakes). The arrangement is applicable from the time you actually close on your existing loan until the end of your term for insured risk.
After the mortgage insurance is purchased, the amount of money you receive if your home is damaged will be determined by a variety of factors. The amount of money available to you in the event of a disaster will vary according to:
Your original loan balance How much your mortgage payment is Your coverage choices
You can choose how much protection you want. For example, you can choose between $200,000 or $300,000 worth of insurance protection. You also have a choice between how many months worth of payments you want covered. Choices include one month (which covers one payment), two months (covers two payments), and three months (covers three payments) worth of protection for each mortgage payment.
Mortgage Protection Insurance - Sub-Contractors and Mortgage Protections
When you purchase Mortgage Protection Insurance, the company issues an irrevocable letter of credit which is delivered to you or your agent by courier. The letter is automatically assigned a reserve value. This reserve value is based on your outstanding balance plus any adjustments that may be made by the underwriter for loan origination fees, points, or other charges.
The amount of coverage applied to each loan-to-value ratio will be based on the amount of money the company receives in premium payments from policyholders as well as their claim history. The average reserve will be based on the most recent three years of claims.
Mortgage Protection Insurance - How Much Does It Cost?
Another important consideration when determining how much you want to pay for Mortgage Protection Insurance is how much money you want to pay on a monthly basis. For example, if you have $200,000 worth of coverage for your mortgage, and need three months worth of coverage per month, you can choose between paying $100 per month or $200 per month for the amount of protection that you select. So the cost per month is calculated by multiplying the dollar amount of coverage by 12 and then dividing that amount by the number of months that are covered.
This is an awesome post and I wish I could have seen it before I bought my house and also after. Thank you for some very helpful information.
I just want to say thank you for your post. I think most of us couldn't have been told these facts.
Sincerely,
Ragan
I have a question about the Mortgage Protection Insurance . Since it is offered in multiples of $25, how is the coverage amount calculated? I would think the coverage would be for the first or second policy purchased. Or am I not thinking correctly? Thanks
There are multiple factors that go into how much protection you will receive.
Conclusion
Mortgage Protection Insurance is a contractual agreement between the homeowner and an insurance company which provides for protection against loss or damage to your primary residence due to fire or lightning (or sometimes earthquakes). The arrangement is applicable from the time you actually close on your existing loan until the end of your term for insured risk.
After the mortgage insurance is purchased, the amount of money you receive if your home is damaged will be determined by a variety of factors. The amount of money available to you in the event of a disaster will vary according to:
Your original loan balance How much your mortgage payment is Your coverage choices
You can choose how much protection you want.