Many home buyers who purchase a home also buy some form of mortgage insurance. There is private mortgage insurance and general mortgage insurance. Private mortgage insurance is an extra insurance that offers protection for a lender and for a buyer too. Private mortgage insurance helps to protect in the event of a default of payments. It is used in most home purchases. General mortgage insurance can help you in dealing with the loss of a job or a change in your financial situation. Let’s take a look at a few of the benefits that come with purchasing mortgage insurance.
Lower Down Payments Requirements For Homebuyers
A 20 percent down payment was the industry standard for most homebuyers for a number of years. Saving this much money can take a really long amount of time. For example, you would have to save $50,000 to purchase a home worth $250,000. This would make it almost impossible for many individuals to buy a house. Private mortgage insurance reduces the amount of time that it takes for a borrower to get a mortgage. Borrowers may only have to come up with 5 to 10 percent of the purchase price in order to get in a home. This makes the dream of home ownership a reality for a larger number of people.
Job Loss Protection Mortgage Insurance
Buyers of a home can opt for mortgage insurance that provides job loss protection. This is useful insurance because it can keep you from losing your home if you are fired or laid off. There has been a trend of job losses all throughout the United States and internationally. Job loss mortgage insurance will pay all or a portion of your monthly mortgage payment depending upon the insurance that you select. The coverage can last you for as long as a year. This gives you ample time to find a new job while keeping your home safe. It is good to have in these difficult economic times.
Homeowner Privileges and Homeowners Assistance Programs
Some companies offer insurance programs that contain special perks and incentives for homeowners. This can be in the form of offering discounts and savings on special products. This can save you money on furniture, electronics, and other necessary household gadgets. There are even discounts on the actual insurance coverage if borrowers undergo counseling and training classes for new homeowners. Insurance borrowers are also able to receive special workouts and modifications on existing loans. Homeowners assistance programs can help you to structure a loan program that will fit your needs.
You can see that there are numerous benefits to buying insurance products for your new home. You will be able to stay in your home and have the mortgage paid after a job loss. You will also be able to get into a home without having to put down a whole lot of money. Buying mortgage insurance is not only an easy way to protect your biggest investment but it can be a smart and safe financial decision too.