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What does mortgage insurance cover?

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kgwilson99 Joined: 11 Jul 2011 Posts: 1 1.35 Dollars($)	Posted: Mon Jul 11, 2011 12:45 pm    Post subject: What does mortgage insurance cover? Like 0 Dislike 0 My deceased daughter had purchased a home prior to her death. She was paying mortgage insurance but the bank claims it does not pay off the mortgage? She believed it would--I am really confused about this. The bank has reduced the payment--but they simply put what would be paid on the end of the loan. Why does mortgage insurance not pay the home off??
gmakerley Community Mentor Joined: 09 Nov 2007 Posts: 12376 Location: bloomfield, ct 58.49 Dollars($)	Posted: Mon Jul 11, 2011 12:51 pm    Post subject: Like 0 Dislike 0 Mortgage insurance is not what you think it is, it seems. It appears that your daughter bought this particular home with less than 20% down payment. That caused the lender to seek mortgage insurance (insurance against default) from a Mortgage Insurance Company. What is insured is a percentage of the balance of the mortgage. Only Mortgage Life Insurance would pay the mortgage in full upon her death. Is it a life insurance that you're thinking about? If so, it would appear that there was none (it's a ripoff anyway). It seems to me that the lender is correct in doing what it's doing, and the best bet to pay off the loan may well be to sell the home. You didn't say anything about occupancy at this time, which would, of course, impact any decision you make about the home. I hope I've clarified things for you. Double check with the lender again to see if that's the insurance that they're referring to as I suspect. _________________ George M. Akerley Mortgage Underwriter/Consultant Word of Excellence- Writing/Editing/Proofreading 860-221-5044
sabrinatoss Community Expert Joined: 16 Jan 2011 Posts: 513 Location: Australia 82.25 Dollars($)	Posted: Tue Jul 12, 2011 2:01 am    Post subject: hi kgwilson99 ! Like 0 Dislike 0 I have to agree with gmakerley advise. Since this is all about your daughter's deal I can see that you don't really have enough knowledge about it so it would be better if you let an expert evaluate it for you. _________________ Home Loan, Mortgage Insurance Calculator, Mortgage Broker
eskyvest Joined: 29 Apr 2011 Posts: 8 2.32 Dollars($)	Posted: Thu Jul 14, 2011 3:48 pm    Post subject: Like 0 Dislike 0 I agreed. First you have to find out is the "Mortgage Insurance" you talked about is "PMI" of the mortgage payment or "Mortgage Life Insurance" that was paid extra. "PMI" which is called mortgage insurances protect lenders/banks not the borrowers. Val [External link deactivated as per forum rules. Thanks.] _________________ Mr. Val Discovering Secrets Sellers Hide - Special Guide To Newlyweds What You Must Know About Buying Your Dream Home So You Won’t Make The $10,000 Mistake www.HomeBuyerSecretsForNewlyweds.com

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