Mortgage insurance

[directlife]

Can anybody tell me about mortgage insurance. Why we need this?

[Admin]

Mortgage insurance protects the lender against loss in the event that the borrower defaults. The borrower pays the premium, but the lender receives the protection.

Mortgage insurance has no connection to any kind of life insurance, and pays no benefits to borrowers. The sole benefit received by the borrower is that, with mortgage insurance, lenders are willing to make loans with down payments smaller than 20% of purchase price or appraised value.

Hope that explains it.

[master01]

Insurance is a great way to safeguard your self from the uncertainties in life. Mortgage Payment Protection Insurance is designed to protect you from getting into debt or missing the mortgage payments due to unemployment.

If you are living in a country like UK mortgage insurance is extremely important to protect your self from getting into ever increasing debt. In case you are not able to make the mortgage payments on account of various reasons like unemployment due to ill health or old age etc, having the Mortgage Payment Protection Insurance or mortgage insurance really helps.