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Real: Homeowners pay for many kinds of insurance

Real: Homeowners pay for many kinds of insurance

Real: Homeowners pay for many kinds of insurance
News from The Republic:

A typical homeowner has multiple insurance policies beyond a standard homeowners insurance policy. Some types of insurance are optional and some are mandatory, depending on your location and whether you have a mortgage. Some insurance policies protect you directly, while others safeguard your lender. — Mortgage insurance protects the lender or investor against default from the borrower, says Anthony Guarino, vice president of public policy development and research at Genworth Financial Mortgage Insurance in Raleigh-Durham, N.C. The borrower pays the insurance premium, even though the lender is the beneficiary. Usually, the premium is added to the monthly mortgage payment.

Private mortgage insurance, or PMI, is required for conventional loans with down payments of less than 20 percent. Premiums vary according to the characteristics of the mortgage loan and the borrower, Guarino says.

“PMI was created because lenders were unwilling to make loans with a lower down payment because of the risk,” says Guarino. “Without PMI, homebuyers would have to come up with a 20 percent down payment for their purchases.”

Private mortgage insurance has a government counterpart: the Federal Housing Administration, which insures FHA loans.

Title insurance protects the policyholder against claims about rightful ownership of a…………… continues on The Republic

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