Homebuyer Guide

Considering Insurance

As a homeowner, there are several types of insurance you will want - or need - to consider.

Homeowner’s Insurance protects your home, and the things inside, from various kinds of damage and theft.

When you purchase a condominium, usually the condominium association’s master policy includes coverage of the structure of the building, but it will be up to you to provide a separate policy insuring your belongings inside.

Private Mortgage Insurance (PMI) or Mortgage Insurance Premium (MIP) is often required by lenders and with certain types of loans depending on the loan-to-value (LTV) (e.g, loans with a high LTV ratio, or small down payment). Such a policy guarantees the lender payment of a certain portion of the loan balance in the event of a default and foreclosure. Lenders require you to make monthly payments on this insurance along with your principal and interest payment.

Mortgage Life Insurance is an optional policy which protects your family and estate by paying off your loan in the event of your death.

Mortgage Disability Insurance coverage is similar to Mortgage Life Insurance, exept that it guarantees to make your loan payments only for the time that you are disabled. If you decide you want either type of coverage, you’ll find many lenders offer programs that allow automatic payments along with your monthly loan payment.

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