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3 Key Facts About Mortgage Insurance

Mortgage insurance is a type of rider insurance policy that brings with it the benefit of knowing that if you should lose your employment involuntarily, your home mortgage payments will be taken care of for a period of time or possibly indefinitely depending on the type of injury and/or insurance policy that you have purchased.

In times of a difficult economy, the assurance that a homeowners insurance policy provides is important for maintaining financial stability and viability. With home foreclosures at an all time high, there isn't much sense in believing that you are immune to the possibility of needing a level mortgage insurance protection. How much mortgage insurance will cost and what your policy will do for you depends on several factors including:

  • Your standard of living
  • The size of your home mortgage payments
  • The current economic forecasts
  • Your employment and the chances of you losing your job
  • How long you would be expected to be unemployed if you lost your job

3 Facts About Mortgage Insurance

  1. Not Everyone is Covered: Before deciding on a mortgage insurance plan or searching mortgage insurance agents to help you find a plan, you should know that not everyone can be covered by mortgage insurance. Generally, exclusions exist for retired military persons, those who are self-employed and independent contractors.
  2. Maximum Benefits Differ Among Insurance Companies: If you use one of the licensed mortgage insurance agents to be found through this site, they will tell you that not all plans offer the same level of protection in terms of price, or duration of disability payment should it come down to it. You should make sure your agent shows you several quotes and takes into account your current mortgage payment and income levels.
  3. There Is a Period of Non-Payment: If a situation arises, such as a job loss, which would cause your mortgage insurance to kick in, there is usually a grace period of about 60 days before payments begin. For this reason, you will want to keep a savings account that includes at least 2 months of living expenses including your mortgage payment, in an interest-bearing checking account that is easily accessible.

While having a good mortgage insurance plan to assist you in financial hardship in difficulty, remember that paying your mortgage will not be your only expense should you lose your job unexpectedly. There are still utility bills, probably car payments, credit card payments, and your general living expenses such as gas and food to worry about as well. For these reasons it is recommended by many financial experts that you keep an emergency fund saved up at all times that will allow you to pay 5-6 months of your living expenses on your own.