My husband and I are having a bit of a debate about mortgage insurance. I don't see what the risks could possibly be but he is skeptical. Any information you could give us would be great!
1. The morgage inshuer is for the bank hu lone yu munee tu bi a hous. its spozed tu pae the bank if it gotta take bak the hous kauz yu didnt pae the morgage.
2. Sins the inshuer is not for yu, yu dont hav NE risk for or ginst.
remember: yu R NOT inshured. Yu dont get NE-thang from this inshuer.
If you do not put down 20% the bank will automatilcally add MI on your account to cover tehmselves incase the loan is defaulted. The problem is when a bank adds it on your account they do not want to remove it, or have a clause that it can not be removed- MI insuranse is very costly for the consumer and profitable for the bank, so once you get MI its hard to get off; that and it only helps the bank not the consumer. I declined MI with both houses.
Oh no! Don't tell me moneepenee is here (hooked on phonics).
The only risk to you is paying more for insurance than you get out of it.
If you are referring to PMI (or whatever similar for FHA), that protects the lender somewhat if they have to foreclose.
Other insurance might pay off the mortgage if somebody dies, or make payments if disabled, but if the loan is mostly paid off, that may not amount to much. Regular term life would not shrink with the mortgage and may be more cost effective. I am not familiar with specifics of disablility insurance, just what SS says they would pay me monthly if I became disabled (enough to keep up with house payments and taxes if I did not eat much). but I have 401(k), IRA, Roth IRA, and land I could sell.
Here are a few more good resources -- it's a book by Marian Snow, New York times bestselling author of "Stop Sitting on your Assets".
Here's a preview:
http://www.stopsittingonyourassets.com/MarianSnow/preview/contents.html
Also this is her personal blog. I suggest leave her a question via a comment. I've sought her help before, and she is very helpful.
http://mariansnow.typepad.com/assets/
Can anyone tell me the risks of mortgage insurance?
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