When you buy your first home, it can be very frustrating and complicated but it can also be very exciting. There is no feeling like being able to call a house your own and have the freedom to decorate it and change it the way you want to.
Do you want old cars or equipment on your lawn? Go for it! Want to put in a new swimming pool on your own? Sure, it’s YOUR house and you can do what you want!
Unfortunately, unexpected events sometimes happen in life and you may not be able to make your loan payments all the time. This is where private mortgage insurance comes in.
When you first buy your home, most lenders will expect you to either pay a large down payment of 20% or more or they will require you to get some kind of loan protection program which is called private mortgage insurance.
This insurance coverage will protect the lender in case you are ever unable to make your monthly payments. This is all that is covered and the insurance does not cover anything else. If your home catches fire or is caught in a hurricane, you will need to have other types of insurance to cover these damages. Private mortgage insurance witll only to cover you if you fail to make your mortgage payments.
Even if you don’t need it, it doesn’t hurt to get private mortgage insurance just in case. With the state of the economy today, no job is 100% reliable and changes can happen at any time. If you have to relocate or change jobs, you won’t have to worry about your house payment if you happen to go a week or two without pay. It’s better to be safe than sorry and so that’s why we highly recommend that everyone purchase private mortgage insurance when purchasing a new home.