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Hello,

I'm really close to closing on my first house and have some questions about payment protection. At my job, I have long term disability coverage that pays 70% of my base salary. Since my base salary is significantly less than what I actually make, due to shift differentials, commissions and bonuses, that 70% does not cover my monthly expenses. So, I have been looking into mortgage protection insurance. There are a couple of things I am not clear on.

1. Will this be offered to me at closing? Similar to how it is offered when you sign up for a credit card?

2. Does the coverage start immediately? If I bought a house today, and was laid off next week, would it cover me?

3. Does my long term disability insurance effect the payout? In other words, would the mortgage insurance be reduced based on how much disability insurance I am getting?

4. If I did for some reason need to use it, would it impact my credit?

5. When I was looking for a quote one site wanted to know the dollar amount of coverage. Is this what I paid for the house? The amount of money I would normally pay in mortgage payments during the length of coverage (i.e. $542*12*10)?

sara · Posted: Mon Mar 07, 2011 3:26 am Post subject:

Hi MathGrrl,

As far as I know, you can go for a mortgage protection insurance at the time of the closing of the mortgage. You should check out the coverage of the insurance policy in order to find out if it will start immediately. As far as your 3rd question is concerned, you should contact an insurance agent and he will be able to help you in this matter. The mortgage protection insurance won't affect your credit.

Take care.

jveenstra · Posted: Mon Mar 07, 2011 11:05 am Post subject: Insurance

No one is going to offer you insurance at closing.

You could ask your lender before closing if they offer insurance. If they do, you have someone to talk to. If they do not, you need to check around like you are doing.

As long as the mortgage payments are made, your credit is not affected.

The insurance agent needs to answer your other questions.

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