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What Type Of Insurance Do I Need When Getting A Home Mortgage?

By Kevin Landis

What type of insurance do I need when getting a home mortgage?  Read here to understand what insurance you need to be fully protected!

Since purchasing a home is the largest investment most people will ever make, having adequate insurance coverage is quite important.  In fact, many lenders will not approve a mortgage unless adequate insurance is in place.  Depending on location of the home, there are various types of insurance which must be purchased.

Homeowner’s Insurance

The first type of insurance you need when getting a home mortgage is homeowner’s insurance.  This type of insurance will protect your home in the event of partial or total damage and theft.  This insurance is required by most mortgage lenders because it ensures the lender that in the event the home is damaged; they will still recoup their investment.  All of your personal items within the home are also covered by a homeowner’s insurance policy.

Natural Disaster Insurance

The next type of insurance you need when getting a home mortgage is natural disaster insurance.  This type of insurance includes flood insurance, earthquake insurance, or hurricane insurance.  Most traditional homeowner’s insurance providers will not cover these events if your home is located in an area which experiences a lot of natural disasters.  To be insured in the event of these catastrophes, you will need to take out an additional policy.

Private Mortgage Insurance

The last type of insurance you need when getting a home mortgage is private mortgage insurance.  Private mortgage insurance, or PMI, is an insurance that insures the lender that in the event a borrower defaults on the loan that the lender will be able to recoup their investment.  Mortgage lender will often require their borrower’s to pay for private mortgage insurance if they put down a down payment less than 20% of the purchase amount.

Related posts:

1. How How Much Insurance Do I Need After Being Approved For My Home Mortgage?
2. How can I terminate my private mortgage insurance?
3. What Is Title Insurance For A Mortgage Loan And Why Is It Required?
4. How Much Does Mortgage Loan Insurance Cost?
5. What Is Private Mortgage Insurance?