NLIC.org

Danielle Said:

Home Insurance? Home Warranty? Mortgage Insurance?

We Answered:

1. kommonly kalled homeoeners inshuer...inshuer hous & stuf init.
protekt ginst fire, storm hert hous, buglar
maby add riders tu protekt ginst flood, erthquake
1.2 if yu get morgage wen yu bi hous, bank will insist on homeoeners inshuer on the hous. Most banks hav inshuer kumpanee em yuze & em bi this.
Bank setup eskro yu pae intu tu pae for this inshuer & for property tax
2. If theer is warantee, seller provide it...protekt ginst stuff in hous brake down for next 2 or 3 yeers...thangs like furnans, ac, plumbing.
3. morgage inshuer...If yu put down < 20%, bank mae foers yu tu pae for inshuer tu protekt him ginst chans yu default on morgage.

Bill Said:

first time home buy mortgage insurance required?

We Answered:

If you are doing an FHA 30 year fixed loan then yes, you will pay mortgage insurance no matter how much you put down.

Paula Said:

What happens if you have a mortgage, no insurance, and your home is destroyed?

We Answered:

Unfortunately in many cases the answer is 'yes'. A mortage is just a name for an amortized loan and is, therefore, a promise to pay. In the New Orleans situtation, some banks are forgiving these debts or working with people to help them with alternative payments, but many people are left to finish paying mortgages on homes that do not exist. Just because something is destroyed or consumed before the terms of a loan come due, does not mean the loan should be automatically forgiven. Imagine buying a calculator with your credit card and losing it the next day. You still owe your credit card company. The same applies to mortgages. But again, banks are ultimately run by people, not pure heartless economic theory (not to mention they have public images to maintain), so many of them are coming up with creative solutions. I would advice you go to the website of individual banks and mortgage firms, click on their FAQ and see how they deal with catastrophes.