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Clyde Said:

Anyone out there know the benefits of mortgage insurance?

We Answered:

Mortgage insurance can mean several different types of insurance.

1. (a) If you are purchasing a home and are requested to carry mortgage insurance this is an insurance policy that protects the lender if the mortgagee fails to pay his mortgage. It does not insurance the property or the home owner.
(b) a mortgagee can obtain mortgage insurance when purchasing a home to insure the title of the property is clear if any problems arise while the homeowner has the home. This is a one time fee paid when the home is financed. Most homeowners do not get this type of insurance.

2. Mortgage insurance can also be mistaken to mean home owners insurance. Homeowners insurance covers the property up to a certain dollar amount and the homeowner will choose the insurance company.

3. Some people believe that mortgage insurance is insurance that will pay off the remaining debt on a mortgage if the mortgagee dies. Simply put it is nothing more than a life insurance policy that pays off the mortgage. Some lenders offer this coverage, some do not. Alot of times it is cheaper to get a term life insurance policy.