merrill@raja.DEC (10/29/85)
Since the insurance normally is designed to payoff the mortgage when you die, you are unlikely to get many firsthand reports (here). My opinion is that it is not a good investment, since I suspect that the premiums are roughly the same as for any form of declining coverage but I do not know whether you MUST pay off the mortgage with the proceeds or not. If the beneficiary MUST pay off the mortgage then they are deprived of other options which they would have had through ordinary life insurance. RMM
johnl@ima.UUCP (11/08/85)
/* Written 2:39 pm Nov 6, 1985 by traite@wanginst in ima:net.invest */ > I don't have a house or a mortgage, but from the discussion on net, it > seems that mortage insurance will only pay the balance of the mortgage due > to the holder of the mortgage, AFTER ASSETS, OF THE MORTGAGE TAKER, I.E > THE HOUSE, HAVE BEEN EXHAUSTED (SOLD). No, mortgage insurance pays off the balance of the mortgage so that the bereaved survivors don't have the extra misery of being kicked out of their house. But as I said before, if that's something you want to be prepared for (and if you're the only moneymaker in your family, you might well) you should increase your regular life insurance to cover the amount of the mortgage due, rather than taking out a special policy just for the mortgage. It'll cost less and give more flexibility. John Levine, ima!johnl PS: If the bank reposesses the house, sells it, and it still doesn't cover the mortgage, that's the bank's tough luck, and it suggests that they were pretty dumb to lend more than the house was worth.
mat@amdahl.UUCP (Mike Taylor) (11/11/85)
> > /* Written 2:39 pm Nov 6, 1985 by traite@wanginst in ima:net.invest */ > > I don't have a house or a mortgage, but from the discussion on net, it > > seems that mortage insurance will only pay the balance of the mortgage due > > to the holder of the mortgage, AFTER ASSETS, OF THE MORTGAGE TAKER, I.E > > THE HOUSE, HAVE BEEN EXHAUSTED (SOLD). > > No, mortgage insurance pays off the balance of the mortgage so that the > bereaved survivors don't have the extra misery of being kicked out of > their house. > Are we not confusing mortgage life insurance, which is something to look after survivors, with mortgage credit insurance ? I thought these were two different things. The first kind is normally bought by individuals, whereas the second kind is required by lending institutions when the down payment is low or credit questionable. Of course, the borrower pays the premium in both cases. -- Mike Taylor ...!{ihnp4,hplabs,amd,sun}!amdahl!mat [ This may not reflect my opinion, let alone anyone else's. ]
jvb@duke.UUCP (Jack V. Briner, Jr.) (11/14/85)
There are two types of Mortgage Insurance. Make clear which one you are talking about. The first one is one that is beneficial for the mortgage company and is frequently called PRIVATE MORTGAGE INSURANCE (PMI). This is normally' added to your monthly payment until your equity reaches 20%. Be aware how your mortgage company deals with this, they may not automatically cancel it. The second kind, which is often offered via your mortgage company, is another form of Universal Life Insurance. (As you own more of your house, the premiums should go down because the amount to pay off is less. Although your age has gone up, some argue.) If you (or in some cases your spouse) dies, the mortgage company is paid the balance of your loan. I can see no advantage of this over Universal Life or Term Insurance. This insurance should be properly' labelled CREDIT LIFE INSURANCE. In the general case for CLI, I see no need to have backup but you should have something to backup your home which may be a large financial strain. (Your car can always be returned to finance company).