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Lucille Said:

What exactly does Private Mortgage Insurance cover?

We Answered:

Private mortgage insurance, covers THE BANK, if they have to foreclose on your house, and end up selling your house at auction after foreclosure, for less than the balance on your loan.

Then they STILL can sue you for the difference! And you'll still owe it!

You have it until you have 20% equity in your home.

It's something YOU buy, but you'll NEVER benefit from it. Except being able to have a mortgage.

Leo Said:

What does mortgage insurance cover and do you need it?

We Answered:

It covers the bank - if you die, they get the mortgage paid off. Unless they force you to get it (and I would protest) you don't need it. That's my opinion, but why guarantee the bank gets their money? If you die, what do you care?

If you are married and have children and would leave a spouse without means to pay a mortgage payment, then that's different. It would supply some assurance. But it is rather expensive and unless you are comfortable with the extra $100-$150 per month, forget it.

Most of us don't have it... and so far, so good. lol

Violet Said:

Does the homeowner's insurance have to cover the mortgage amount?

We Answered:

Legally, no, but that doesn't mean the mortgage company won't give you a HORRIBLE time over it.

Legally, as long as your house is insured for 100% replacement cost, and the policy SAYS that, and the insurance company agrees that your house is insured for 100% of the replacement cost, the mortgage company should accept that.

However, it will be a battle - and likely, you'll be fighting that battle EVERY SINGLE YEAR when your policy renews, until the loan balance drops under the policy amount.

You can ask your AGENT to fight that battle for you.

Beth Said:

Had a house fire - should Insurance cover mortgage?

We Answered:

No, but you should have "additional living expense" which would cover rent on wherever you're living now while the house is being rebuilt.

The mortgage you'll have to pay just like you usually do.