Insurance Considerations

Private mortgage insurance is a type of insurance that protects a mortgage lender against losses incurred if they have to foreclose on a mortgage.

Private mortgage insurance is a requirement for anyone who owes more than 80% of the equity of the home. Note that it is equity that is looked at, not the mortgage size. Thus, if you repaired a fixer-upper or bought a house in an area that saw house values appreciate rapidly you may have reached the point where you have reached the 20% equity point much sooner than you thought. If this is the case you can drop the private mortgage insurance and save yourself the premium cost.

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Home insurance is purchased in order to protect you against damage and/or loss of your property as well as giving you liability protection in the event someone is injured or something is damaged while on your property.

There are a variety of home insurance products available depending on the type of dwelling you live in. There are three basic types of home policies:

• For Renters and Students - where the person living in the home doesn’t own the property they are living in.
• For Condominium and Co-op Owners – where the person living owns the property they are living in, but there are common elements to consider.
• For Homeowners – where the person living in the home owns the property.

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