fbpx
Home Insurance and Mortgage Insurance
Many homeowners with mortgages pay for both types of insurance but only one of them protects the owner. Homeowner’s insurance covers damage to your property and losses from fire, burglary, vandalism, and other named natural disasters. When an insured has a loss, they file a claim with the insurance carrier which would be subject to […]
Home Insurance and Mortgage Insurance
Many homeowners with mortgages pay for both types of insurance but only one of them protects the owner. Homeowner’s insurance covers damage to your property and losses from fire, burglary, vandalism, and other named natural disasters. When an insured has a loss, they file a claim with the insurance carrier which would be subject to […]

JXDPSJdZoE2W8O4UEzQWLA.jpg

Many homeowners with mortgages pay for both types of insurance but only one of them protects the owner.

Homeowner’s insurance covers damage to your property and losses from fire, burglary, vandalism, and other named natural disasters. When an insured has a loss, they file a claim with the insurance carrier which would be subject to the deductible mentioned in the policy.

If the homeowner has a mortgage on the property, the lender will require that the borrower carry adequate insurance on the property and name the lender as an additional insured. This protects the lender that the home will continue to be sufficient collateral for the loan in case of a loss.

Mortgage insurance is not like homeowner’s insurance in that it is solely for the protection of the lender if the borrower defaults on the loan. Usually, lenders require mortgage insurance on any loan greater than 80% loan-to-value. Occasionally, they may require it on some loans less than 80% based on their underwriting requirements and possibly, from anticipated risk from the borrower.

VA loans do not require mortgage insurance. Conventional lenders must remove the mortgage insurance when the loan amortizes below the stated percentage. FHA loans require mortgage insurance for the life of the loan.

When a property appreciates so that when the owners refinance, the loan-to-value ratio is less than 80%, no mortgage insurance would be required. This can be a strong motivation for some owners to refinance to save the cost of the mortgage insurance.

Mortgage insurance premiums are not regulated by law like homeowner’s insurance is in most states. Most buyers are concerned about the interest rate on their mortgage, but few question the amount of the mortgage insurance premium.

The homeowner can select the carrier for his homeowner insurance, but the lender determines the carrier for the mortgage insurance. When you are interviewing lenders, the type of insurance that will be required and the price of the mortgage insurance should be included in the discussion.

LIST OF BLOGS

Understanding Credit Life Insurance for Home Buyers

Credit life insurance is a specialized type of insurance designed to provide financial protection for borrowers and their families in the event of the borrower's untimely death. This insurance is often associated with loans, including mortgages, and is specifically...

Discover how to make a difference in your neighborhood

Whether you're a seasoned homeowner or just starting this thrilling chapter, every time you turn your key, you're not just entering a house but also embedding yourself in a neighborhood. The heartbeat of a vibrant community doesn't solely rest upon pristine lawns or...

How Home Value Growth Beats Renting

Over the last 60 years, the average sales price of homes has appreciated at a rate of 5.56% annually, according to the Federal Reserve Economic Data. During the same period, rent has increased at a rate of 3.88% annually which presents a compelling argument in favor...

Access “Trapped Equity” without Refinancing

American homeowners have a record amount of equity in their home. Many of these homeowners would like to cash out part of that equity but don't want to trade an historically low interest rate for one that is as high as it's been in 20 years. Instead of refinancing...

Navigating Closing Costs During Your Home Sale

Buying or selling a house is an exciting and sometimes confusing experience that includes expenses called "closing costs" that can often catch us by surprise. Closing costs are simply the fees and expenses incurred by buyers and sellers during a real estate...

Tap into your home equity five ways

Your home is not just a place to live; it's a valuable asset that can serve as a financial resource when you need it most. One of the significant advantages of homeownership is the opportunity to build equity over time, which can be accessed in various ways to fund...

New Construction Homes with Your Own Agent

Homebuyers in the market who are frustrated by the low inventory are finding what they want in new construction. Among the obvious advantages are that it is fresh and new, has never been lived in, and can be personalized to an individual's taste and needs. New...

How Rapid Rescoring Can Make a Difference

Imagine you're on the verge of securing a mortgage, and a slightly higher credit score could mean a lower interest rate. The good news? There's a quicker way to make that possibility a reality. Mortgage loans are often more time-sensitive than other loans. If you find...

Why It’s a Smart Move to Buy a Home in the Current Market

If you're in a financially stable position, now might be the perfect time to embark on your homeownership journey. Buying a home today offers several advantages, including the opportunity to build equity and stabilize your housing costs in the face of rising expenses....

RECENT POSTS

ABOUT  TWENTY
THREE HOMES

The Twenty Three Homes are one of the premiere real estate groups locally, nationally and internationally, specifically dealing with high-end properties and exclusive clientele. Partner with Keller Williams Twenty Three Homes are full service real estate experts whose clients benefit from the custom tailored, hands on service while receiving all the exclusive amenities and resources of one of the most established and respected firms in the business.

GET IN TOUCH