About Home (or) Mortgage Insurance
Texas Home Mortgage Protection Insurance ensures that if you die prematurely your home mortgage can be paid off immediately so that your family or dependents can keep a roof over their heads. A level policy provides the same amount of life coverage over the full term of your mortgage.
Death Benefits are paid directly to the beneficiary who would then have the ability to pay off the mortgage balance and use any remaining amount at their discretion such as paying off other debt, meeting other living expenses or supplementing for retirement needs. Of course, you need to have enough protection to at least cover the mortgage loan. However, you might wish to take out slightly more than what you owe to ensure a surplus cash benefit for your dependents.
Types of Mortgage Insurance
Private Mortgage Insurance (PMI) is default insurance on mortgage loans, provided by private insurance companies. PMI allows borrowers to obtain a mortgage without having to provide 20% down payment, by covering the lender for the added risk of a high loan-to-value (LTV) mortgage. The Homeowners Protection Act of 1998 requires PMI to be canceled when the amount owed reaches a certain level, particularly when the loan balance is 78 percent of the home's purchase price. Often, PMI can be cancelled earlier by submitting a new appraisal showing that the loan balance is less than 80% of the home's value due to appreciation (this generally requires two years of on-time payments first) Different terms:Mortgagee's Title Insurance is a policy that protects the lender from future claims to ownership of the mortgaged property. Generally required by the lender as a condition of making a mortgage. In the event of a successful ownership claim from someone other than the mortgagor, the insurance company compensates the lender for any consequent losses. Mortgagor's Title Insurance is a policy protecting the buyer/ owner of real property from successful claims of ownership interest to the property. The coverage usually is supplemental to a Mortgagee's Title Insurance policy, and the premium is customarily paid by the buyer.
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