i was told today by a loan officer,that in order to get a fha loan, i needed to buy home loan morgage insurance. which is to cover them if something happens to me if i can’t pay. i told them i have home insurance already (which i have to show to them proof of every 6 months). why would i have to pay two times for the same thing. if something happens to me doesn’t my current home owners insurance automatically pay for it?
Answer:
PMI or mortgage insurance covers your lack of putting down 20%. Should you default, MPI would pay the shortfall of the downpayment ONLY….not the entire mortgage. Homeowners insurance covers your belongings and the structure.
3 comments
roxxygrrl13 says:
January 7, 2011 at 1:19 pm (UTC 0)
Home insurance insures the contents of your home and the fixtures in case of a flood disaster or fire.
Landlord says:
January 7, 2011 at 1:21 pm (UTC 0)
They want insurance on you, so they can make a claim in the event they have to foreclose on you.
Your insurance covers your house, not your actions.
reenzz says:
January 7, 2011 at 1:23 pm (UTC 0)
PMI or mortgage insurance covers your lack of putting down 20%. Should you default, MPI would pay the shortfall of the downpayment ONLY….not the entire mortgage. Homeowners insurance covers your belongings and the structure.