Explain how Mortgage Insurance works. (PMI, escrow, premium, default)

[jerseygal4u]

Not to be confused with PMI btw.

I read conflicting things on it.


Many sites say if you lose your job,die, or are disabled, that the insurance company would either make payments(if sick) or pay off your mortgage,and your heirs can still keep the home.


Others say it is not worth having,because the MPI companies dont really want to pay.

Thoughts?

[need4speed2012]

Explain Mortgage Insurance

Explain Mortgage Insurance | Home Guides | SF Gate

[LifeIsGood01]

What you are asking about is not mortgage insurance. Mortgage insurance protect the bank/lender if you default. It protects the lender, not you.

You want some type of disability insurance that would pay for your mortgage and expenses if you can't work.

[Electrician4you]

Originally Posted by so954

What you are asking about is not mortgage insurance. Mortgage insurance protect the bank/lender if you default. It protects the lender, not you.

You want some type of disability insurance that would pay for your mortgage and expenses if you can't work.

This^^^^

[Texas Ag 93]

We have one of these policies with our insurance company and it is referred to as "mortgage disability insurance". It is not a large policy, and would only pay about 1/3 of our current mortgage costs, but at the time we purchased it (about 8 years ago), it would have covered almost all our monthly mortgage and escrow expenses. Can't remember the specifics off the top of my head, but I think it is a term policy of maybe 3 or 5 years, and the premium is pretty negligible.

At this point, since it covers less than half the mortgage, it's not that helpful, but when I had a lower mortgage, it gave me additional piece of mind....