by lisa_owen » Thu Jul 22, 2010 02:02 am
My husband said that when he purchased pmi after we purchased our home that it was in case he died. We have homeowners insurance and life insurance policies and I just wanted to know if that were true about PMI
Posted: Thu Jul 22, 2010 03:03 am Post Subject:
PMI is insurance that protects your lender against non-payment should you default on your loan, not if you or your spouse dies. It's important to understand that the primary and only real purpose for mortgage insurance is to protect your lender—not you. As the buyer of this coverage, you're paying the premiums, so that your lender is protected. PMI is often required by lenders due to the higher level of default risk that's associated with low down payment loans. Consequently, it's sole and only benefit to you is a lower down payment mortgage
The insurance that helps the widow with the mortgage is called Mortgage Protection Life Insurance. It will pay off the mortgage in the event that the insured dies.
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