does mortgage insurance pay your mortgage if you become unemployed?
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does mortgage insurance pay your mortgage if you become unemployed?
my husband lost his job for a year i get social security disability payments every month for myself for being disabled. we have mortgage insurance. does it pay our monthly payment for a period of time until we can pay it?
Asked on June 18, 2009 under Real Estate Law, North Carolina
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 15 years ago | Contributor
It is unclear what type of mortgage insurance you have. Private mortgage insurance (PMI) and mortgage protection insurance are often confused. Mortgage protection insurance is essentially a life insurance policy designed to pay off your mortgage in the event of your death. Whereas, private mortgage insurance protects your lender, allowing you to finance a home with a smaller down-payment. It does not, as we know it, pay your mortgage due to loss of a job. If you fear that you will have difficulty making your mortgage payments contact your lender immediately. You may be able to qualify for modification or work out some other deal with them, depending on how long you have been in the house, your rate, if you will be able to get unemployment, etc. Don't wait until you are in default and have all those fees put in there too. I know that it is scary but facing it all sooner rather than later is better for you. Good luck.
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