The PMI coverage is supposed to drop off when the loan is paid down 20 percent. But recently, with lower interest rates, many homeowners refinance when they can show they have 20 percent equity. If home values are going up, that can happen quickly.
In addition to homeowners insurance and title insurance, the third important insurance product most homebuyers need is private mortgage insurance (PMI). As discussed in Chapter 2, this is a policy that protects the mortgage company from a buyer’s defaulting on a mortgage. Were it not for this type of insurance, investors wouldn’t invest the dollars [...]
Many people confuse mortgage life insurance with private mortgage insurance, or PMI. As you recall from previous discussion, PMI is an insurance policy that mortgage lenders require on loans with less than 20 percent down to protect them from loss should the owner default.
After getting together with the insurance adjuster and their agent, the couple was shocked to learn that it would cost them more than $12,000 out of their pocket to restore the house to the condition where they could move back in. Their insurance policy would pay to bring it up to ‘‘as was’’ condition but [...]
The cost to bring the house up to current building codes is up to you. You can solve this potentially expensive problem by getting ordinance and law coverage, which is a rider to your homeowners policy that applies to the costs of upgrading your home to meet existing building codes. Keep in mind that this [...]