Mortgage Payment Protection
Buy a House with Confidence

Without mortgage payment protection insurance, how would Becca and Paulo buy a house? They'd saved a 5% down payment and their mortgage preapproval process was complete. They were prepared and set to go.

And then they caught wind of a ugly rumor. By next year, the factory might begin lay-offs. Uncertainty stifled their plans and buying a house was back-burnered, just like that. A year later, the factory never laid off. But by the time the couple decided it was safe to buy, housing prices were rising and mortgage rates too.

If you or someone you know wants to buy a house, reading the following article will offer hope.

Mortgage Payment Protection Insurance

Everyone knows that now is the ideal time to purchase a home. In fact it may be the best opportunity for buying a house in the last 30 years.

Who would have dreamed that real estate prices would have fallen between 20 percent to 40 percent, even more in some areas? In addition, many home builders are offering incredible incentives such as swimming pools, thousands of dollars in upgrades, and complete landscape packages.

And now builders are even offering to help you make your monthly house payments if you lose your job.

How? It is called Mortgage Payment Protection Insurance.

Job Loss And Mortgage Payment Protection

The fact is many who would like to take advantage of the economic environment are simply afraid they might lose their job or be laid off. Buying a house seems risky if you're concerned you might be unemployed.

But here is a solution that some builders, lenders, and realtors are offering. It is a mortgage payment protection plan for home buyers at risk with employment.

Unemployment Mortgage Payment Protection Plan Example

For a lump sum a builder will pay between $450 to $900 to cover a customer. Some absorb the cost just as they would any other incentive promotion and others pass it on to the buyer.

Of course savvy buyers know all things are negotiable.

Compare Mortgage Payment Protection With Builders

Builders are offering different versions of mortgage payment protection.

One builder offers a one year membership that qualified buyers can opt into. It provides mortgage payments of up to four months in the event of unemployment.

In other cases, this builder pays for the protection. Note that it may depend on insurance regulations per the particular state you are buying in. If a buyer wants to extend the plan beyond one year that option is available.

Another plan offered by a different builder covers mortgage payments up to $2500, depending on the market, up to six months. The program lasts up to two years after the purchase.

Other builders offering mortgage protection require you to use their lender and will pay up to $2500 for six months if the buyers loses a job within the first two years after closing on the home.

Listen to this. Another builder is offering to refund all mortgage payments if the appraised value falls below the sales price after three years. They will let buyers walk away from the property if they lose their job or just can't make the payments.

Although the builder says the buyer won't have foreclosure or credit issues, I'd add Buyer Beware! Never the less, if you are careful there are some incredible opportunities out there.

Home Warranty Program Similarities

Realtors are also testing out the mortgage protection payment idea in selected markets right now. My guess is that mortgage protection insurance is going to become a fixture soon throughout the residential real estate industry, similar to home warranty programs.

One real estate company is testing the program in specific regions at a cost of $650 to protect payments up to $2500 for as long as six months. The cost for such a policy can be negotiated between the buyer, seller, lender, or Realtor.

Unemployment Protection And Buying Mood

In conclusion I suggest reading the fine print before you opt for mortgage payment protection insurance or any version of it. You may receive just as much benefit from a reduction in price or a request for additional upgrades.

But if job loss is a concern, unemployment protection for your mortgage payments may be just what you need to put you in the buying mood.

If you enjoyed Mortgage Payment Protection, you will like our Mortgage Loan Payment Calculator - My Little Secret also.

Prime Real Estate Articles Tip No.44
Home Mortgage Application | Fee Simple Or Leasehold

How will you respond when your lender asks how the estate will be held?

Fee Simple or Leasehold? Fee simple is by far the most common in the US. After buying a house, the homeowner owns rights to both property and dwelling. Estates held in fee simple can be passed to heirs.

Here's something to pay attention to. Mortgage lenders prefer fee simple to leasehold. Why?

With leasehold, the homeowner holds a lease to the property for a specific term, for example 50 or 100 years. We know too well from our renting days what happens upon lease expiration. Terms change and those changes can affect a lender's rights.

Therefore, leasehold could restrict your choice of lenders, type of home mortgage and future rights to the property.

So, next time you ask your Realtor to write up a purchase and sale agreement for the dream house you just fell in love with, ask first about the property's fee simple or leasehold status.

You owe it to yourself to be in the know!

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