06/12/2024
Insurance can be complicated, but I’m here to help. 💁♀️
Mortgage Protection Insurance is not the same as Private Mortgage Insurance (PMI).
Private mortgage insurance is arranged by the mortgage lender to protect their interests if the homeowner is unable to make their mortgage payments. Lenders sometimes require it if the homeowner has a less than 20% down payment for a conventional loan. The homeowner pays PMI premiums upfront or as part of their mortgage payments.
Mortgage protection still guarantees that the lender is paid, but it activates in the case of the borrower’s death — not missed payments. It also secures homeownership for the homeowner and their family rather than protecting the lender.
