We'll Be Discussing Residential & Commercial Real Estate as an Important Asset for Individuals and Families
In the process we'll also be identifying and reviewing viable opportunities, plans and services to help you meet your goals.
Whatever the choices you make, your holdings should be reviewed regularly to assure they still viable and meeting your current and future needs.
Let's take a look at one of the Real Estate Related Risks inherent to Buying and Holding Residential and Commercial Properties.
What You Should Know?
1) Most Private Mortgage Insurance(PMI) Policies Protect the Lender
2) The Lender Selects & Negotiates with the Broker/Insurer
3) Who Pays for PMI Coverage?
4) What Happens If you cannot Make Mortgage Payments - For Whatever Reason?
5) What Can You Do To Protect Yourself and Your Property(s)?
(Note - See Below For More Details & Suggestions)
The Above Expanded -
1) Most Mortgage Insurance Policies Protect The Lender - According to the Consumer Financial Protection Bureau, "Mortgage insurance protects the lender, not you... Mortgage insurance, no matter what kind, protects the lender – not you – in the event that you fall behind on your payments. If you fall behind, your credit score may suffer and you can lose your home through foreclosure."
2) The Lender Selects & Negotiates with the Broker/Insurer - ICI Florida Lifestyles & Ameris Bank tells us - "Unfortunately, as the borrower, you cannot shop around for your mortgage insurance. Only the lender can. However, you can request a specific PMI provider if you qualify for their product and they are offered by your lender."
3) Who Pays for PMI Coverage? - You Pay - LendingTree explains, "Though most people pay PMI as part of their monthly payment, paying it upfront may be a better option if you have the extra cash and want the lowest possible housing expense."
4) What Happens If I cannot Make My Mortgage Payments - For Whatever Reason? If You Can't Pay Your Mortgage, You're Out - The Property goes into foreclosure and the Lender collects on PMI. ! I've witnessed this happen bout MPI - to clients - Could it happen to you?
5) What Can You Do To Protect Yourself and Your Property(s)?
Mortgage Protection Insurance (MPI) will Protect You, Your Family and Help Secure Your Property!
About MPI - According to Rocket Mortgage, "MPI is a type of insurance policy that helps your family make your monthly mortgage payments if you – the policyholder and mortgage borrower – die before your mortgage is fully paid off. Some MPI policies will also offer coverage for a limited time if you lose your job or become disabled after an accident. Some companies call it mortgage life insurance because most policies only pay out when the policyholder dies."
Note - IMPORTANT - Mortgage Protection Insurance (MPI) protects you - not the Lender!. The two terms "Private Mortgage Insurance (PMI)" and "Mortgage Protection Insurance(MPI)" are often used interchangeably, but They are not the same thing.
According to Equis, "Both Private Mortgage Insurance (PMI) and Mortgage Protection are insurance, but they do different things. PMI is a requirement for certain loans because it protects the lender if your home is lost to foreclosure.
Essentially, with PMI you’re buying insurance for your lender...!
How Does MPI Work? Equis continues, "A mortgage protection policy is usually a “guaranteed issue” policy, meaning that many of the roadblocks to purchasing a life insurance policy, such as health considerations and exams, wouldn’t be there.
If you lose your job or become disabled, your policy will pay your mortgage for a limited amount of time, giving you the opportunity to find work or to make a backup plan. Again, your house is saved, your family still has a roof over their heads, and you’re a hero for thinking ahead. Accidents happen and people lose their jobs every day. Mortgage protection is there to catch you if you fall."
"One More Thing…
A Mortgage Protection Policy(PMI) is a term policy, so you don’t need to keep paying premiums after your house is paid off."
Misconception 1 - PMI is only for protecting Home (Personal Residential) Ownership! In Reality - PMI can we an excellent commercial and strategy for protecting individuals & their family's ownership of commercial and industrial property(s).
Having been an investment property broker, I have been a party to numerous situations where the property owner's - or his family's - ability to pay an existing mortgage was interrupted by disability or death.
Misconception 2 - Mortgage Protection Insurance (As described above) is different than Life Insurance!
In Reality - Mortgage protection can cover more situations than a life policy and should be purchased with a goal of protecting your and family members possession of real estate. Here are some differences:
> Life insurance won’t help if you lose your job and it won’t help if you become disabled.
> Mortgage protection bundles all these protections into one policy – so you don’t need multiple policies to cover all the problems that could make it difficult to pay your mortgage each month.
> A life insurance policy would be a different part of your overall financial plan and often has its own separate goals.
Suggestion 1 - To keep the MPI affordable and to potentially better address you needs, you do not need to cover the total amount of the mortgage debt with the policy. You, and your family, should consider how long family members would desire to continue living in the home/condo - or hold the commercial/investment. A policy could then be selected to assure the capacity to retain the property should a death or disability occur!
Suggestion 2 - Earmark the Reason You Purchased Various Types of Insurance! While recently discussing risk management with a friend, he mentioned to me that he specifically marked the covers on policies and files to reflect why he purchased the policy and the intended utilization of the funds. Policies and their utilization included: Final Expense/Burial Insurance; Life Insurance for estate purposes (to pay down commercial loans); Annuities for Income; Home Owners Insurance; Liability Insurance; etc.
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Want More Information On Protecting These Your Real Estate Assets? Fill out the form to the right - or text us at 216.577.5579. Please provide your contact information including your mobile number and the state where you are located! We'll get back to you to discuss you specifics -- No Cost & No Obligation!
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Conclusion - Whether you are a long time home owner, recent home buyer, or own commercial/investment property, a mortgage protection is a simplified, quick issue insurance that is used to protect your greatest assets. Mortgage protection plans are designed to provide a death benefit to pay off all, or a portion of, your mortgage. Optional riders are available in most states, such as disability income and return of premium, which refunds all, or part of, the premium paid if the policy is unused. This product, offered by many carriers, can be customized to fit you needs and budget.
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