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Tamara Said:

How does Mortgage Insurance work?

We Answered:

Mortgage insurance will pay off your mortgage in case of the breadwinner's death. You should stay away from decreasing coverage policies sold by lender's. These are hooked into how much you owe and decrease as you pay your loan back. unfortunately the premium stays the same. These lender issued policies protect the lender more than you. You should look into a product offered by an independent agent. They can offer you a policy that covers all,part of or a percentage over your loan value. The coverage stays level throughout the policy period and the benefit doesn't decrease as your mortgage is payed down. Additionally you can have benefit riders like illness and accident disability coverage,critical illness and return of premium added,depending on your needs and budget. You pick your coverage and cost and the beneficiaries plus if you move, the policy transfers to your new home. No having to reapply for coverage at a higher rate because of age or developed condition. If interested in more info feel free to contact me. Good luck.

Monica Said:

how does hazard insurance work?

We Answered:

OK, assuming earthquake here, there's nothing to rebuild. The insurance company pays the building limit to the mortgagee, and the contents and loss of use to you. It pays off the mortgage, and any equity (leftover of the check) will be sent to you from the mortgage company.

If it's a fire loss, and you can rebuild, they'll pay either you and the mortgage company jointly, or the general contractor. In which case, you'll still need to make payments to the bank.

If the dwelling limit is lower than the loan, then the mortgage company keeps the check, and you keep making payments until the loan is paid off.