The term ‘Insurance” is thrown around a lot in this industry and it can become confusing to distinguish one from another. “Do I need insurance?” “What am I covered for?” “What are the costs?” are all great questions and something you should be familiar with. Below are the three components that relate to your home and the mortgage.
Mortgage Loan Insurance
Insurance for lenders when the purchase price is greater than 80% of the homes value. This is required when the downpayment is less than 20% and is typically added into the mortgage.
The Three Providers Include:
Home Owners Insurance
Insurance, such as fire coverage, to protect the physical dwelling or property. This type of insurance is required for homes that have a mortgage and must be in place on or before the time of purchase and continue for the duration of the mortgage.
Mortgage Protection Plan
Insurance for homeowners in the event of death, serious accident, or illness that leave you or your partner unable to work. With employer and private polices covering lost income, this covers your mortgage balance/payments.