Mortgage rates are down! It may be a good time to refinance, or learn the income you need to buy a median-priced home in the top 50 metro areas!

Mortgage rates are down! It may be a good time to refinance, or learn the income you need to buy a median-priced home in the top 50 metro areas!

Common Types of Insurance

Common Types of Insurance

Private Mortgage Insurance

Private Mortgage Insurance, or PMI, is insurance that protects the lender against loss if you (the borrower) stop making mortgage payments. Even though it protects the lender and not you, it is paid by you. It may allow you to buy a house with a much smaller down payment, as low as three to five percent of the price of the house instead of the more common 20 percent, making buying a house a sooner possibility for some.
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Title Insurance

Title insurance came about in the US during the 1800s as a means to protect property owners and mortgages against loss from opposing claims or hidden interests in the property due to inadequate deed registry at the time, privately held mortgages which were not always registered at all, and odd laws that came about when the government opened up new land for settlement. It is till used today because certain states still have unreliable deed registry practices, the lack of a uniform national licensing and regulation authority for lawyers and surveyors, and transactions made thought escrow accounts without the benefit of legal advice. Title insurance is all but required before buying a mortgage to protect the lender, and in some states it must be paired with a Surveyor's Real Property Report.

Hazard/Homeowner's Insurance

This type of insurance is used to protect both your home and any valuable contents of the home against some combination of natural disasters, such as fire, wind damage, hurricanes, and hail, and can offer payouts as well in other incidents such as theft, personal liability, medical payments, and the like. Certain plans can also cover other structures on the property that are not a home, such as a detached garage. If you get the right plan, it can cover replacement costs in addition to living expenses if you are displaced for any reason mentioned in the policy.

Flood insurance

Since Hurricane Katrina, the federal government has made a big push for flood insurance. In fact, if you have a federally backed mortgage on a home in a high-risk flood area, it is required coverage by federal law. Hazard/Homeowner's insurance generally does not cover flood damage, and as such a separate policy is needed to cover such an event. Policies will probably cover structural damage (including furnaces, water heaters, air conditioners, and flooring surfaces) and debris cleanup. Some policies can also be expanded to cover home contents such as furniture, collectibles, clothing, jewelry, and artwork. This type of insurance is available in three forms; Dwelling (homes), General Property (apartments and commercial buildings), and Residential Condominium Building Association (condos).

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