One of the requirements for getting a home mortgage is insurance. There are several types of insurance to consider:
- Homeowner's Insurance - This protects your home and your possessions inside from theft and damage. If you purchase a condominium, check with the condominium association to see what coverage they provide and what you'll need. Proof of insurance must be brought to closing.
- Private Mortgage Insurance (PMI) - Conventional loans with less than 20% down payment usually require this insurance. This policy minimizes the lender's risk should foreclosure proceedings be necessary.
- FHA and VA Mortgage Insurance Premium (MIP) - Mortgage insurance is required on all FHA and VA loans. This insurance minimizes the risk to the lender.
- Flood Insurance - If the property you are purchasing is within a flood hazard area identified by FEMA, you may be required to carry flood insurance.
- Mortgage Life and Disability Insurance - Mortgage Life Insurance is an option policy which pays off your loan in the event of your death. Mortgage Disability Insurance coverage guarantees to make your loan payments for any period of time that you are disabled. Should you purchase either type, you may be able to include your premium payments along with your monthly loan payments.