evans@mhuxt.UUCP (crandall) (10/28/85)
Does anyone have any comments on the worth of mortgage insurance? Steve Crandall ihnp4!mhuxt!evans
johnl@ima.UUCP (10/30/85)
> Does anyone have any comments on the worth of mortgage insurance?
Mortgage insurance is worthless. (There, that was simple, wasn't it?)
More specifically, the idea is that if you drop dead, the insurance pays off
the mortgage. That's all well and good, but if that's what you're worried
about, you're invariably better off increasing your regular term life
insurance by the amount of the mortgage. (I know, the mortgage amount
shrinks every year, but for the first years it doesn't shrink by much, and
by the time it does the amount of the mortgage is less worrisome.)
Mortgage insurance preys on more or less the same fallacy as airplane flight
insurance. Sure, there is some likelihood of a plane crashing or of your
heirs having a large mortgage to pay off, but the right way to deal with it
is by your "general case" life insurance rather than by "special cases" that
always cost more. Your heirs are no worse off if you are killed in a plane
crash than if you drown in the bathtub, similarly they can use proceeds from
any old insurance to pay off the mortgage, and save money and have more
flexibility in the bargain.
Many lenders require mortgage insurance, which just reminds you that it
protects their interests far more than yours.
John Levine, ima!johnl
PS: I suppose you should increase your disability insurance, too, but that's
usually packaged in with the life insurance.dberg@noscvax.UUCP (David I. Berg) (11/02/85)
> Does anyone have any comments on the worth of mortgage insurance? > From my point of view it has a great deal of worth, but it would depend on each individual's personal and fincancial situation. Assuming a married couple, especially with children, if the mortgage payments are dependent on the income of all the breadwinners in your home, the loss of any part of that income would place your home in jeapordy. If the mortgage could be supported by the income of either spouse working alone (assuming both sposes are working), the risk is far less and the value of mortgage insurance would be considerably less. The question to ask is: If my household should lose my income, could my family continue to live comfortably in their present home? If the answer is no, then mortgage insurance should be seriously considered. Mortage insurance can be bought for either or both spouses; joint insurance is cheaper than two separate policies. It is not very expensive. I am at age 42 and pay a little over $200 per year for $110,000.00 of mortgage insurance. (My policy covers me alone; it is not a joint policy.) -- David I. Berg (dberg) ARINC Research Corporation San Diego, CA MILNET: dberg@nosc UUCP: {ihnp4 akgua decvax dcdwest ucbvax}!sdcsvax!noscvax!dberg
dave@cylixd.UUCP (Dave Kirby) (11/06/85)
In article <81@noscvax.UUCP> dberg@noscvax.UUCP (David I. Berg) writes: >The question to ask is: If my household should lose my income, could my family >continue to live comfortably in their present home? If the answer is no, then >mortgage insurance should be seriously considered. Absolutely. And let me add a caveat here: shop around. Those ads you get in the mail offering mortgage life insurance are usually from inferior (according to Best) insurance companies, and have outrageous rates. You pay for the convenience of mailing the response card. The bigger companies offer much better rates and more security. Sometimes you can do better with a plain decreasing term life insurance policy that pays off in cash to the beneficiary, rather than to the mortgage company. ----------------------------------------------------------------- Dave Kirby ( ...!ihnp4!akgub!cylixd!dave) (The views expressed herein are the exclusive property of Dave Kirby. Any person, living or dead, found with the same or similar opinions will be prosecuted to the fullest extent of law.)
traite@wanginst.UUCP (Paul Traite) (11/06/85)
> ... If my household should lose my income, could my family > continue to live comfortably in their present home? If the answer is no, > then mortgage insurance should be seriously considered. > ... 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). So, if your household loses your income and can no longer make the house payments, then the house would have to be sold. If the receipts from the sale don't cover the remainder due on the mortgage, THEN the insurance policy will kick in the rest, BUT you get nothing out of the insurance. Is my understanding as stated above completely off the wall? Could someone with a mortgage and mortgage insurance read the fine-print legalise and comment? Hopefully not confused, Paul Traite -- uucp ...!decvax!wanginst!traite csnet traite%wanginst@csnet-relay