All About Insurance Your home is a major investment that should be protected. Insurance policies help to limit your financial burden if something unexpected were to happen, and it protects what you care most about – valuable items and your loved ones.
Home Owners Insurance Homeowners insurance will cover losses and damage to your property, if something catastrophic occurs, such as fire, wind damage, or theft. Standard homeowners insurance doesn’t cover damage from earthquakes or floods, but a lender may require that you add this coverage depending on your home’s location. Your home lender will want to make sure your property is protected by homeowners insurance, and you will be required to provide proof of insurance before the loan is funded. You can choose any insurance provider of your choice, but know that your mortgage loan officer can always provide a recommendation based on your needs.
Private Mortgage Insurance Private Mortgage Insurance (PMI) is insurance meant to protect lenders against loss if a borrower stops paying their mortgage loan. PMI is usually required when your down payment is less than 20% of the value of the home you are purchasing. This is typically added to the monthly mortgage payment. The type of mortgage insurance you’ll pay depends on the type of home loan: • FHA-insured loans require a mortgage insurance premium (MIP) • VA loans require a funding fee • Conventional loans can be insured with private mortgage insurance (PMI)
HOME BUYER’S GUIDE
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