When ever we think about mortgaging property, we have to little bit think and understand about that phrase. Now we are going to discuss what does that property mortgage insurance means.
An insurance policy that protects a mortgage lender or title holder in the event that the person who borrows defaults on the payments, dies, or is otherwise unable to meet the contractual obligations of the mortgage.
Mortgage insurance can refer to private mortgage insurance (PMI), mortgage life insurance, or mortgage title insurance. What these have in common is an obligation to make the lender or property holder whole in the event of specific cases of loss.
Private mortgage insurance may be called “lender’s mortgage insurance” (LMI) if the premium on a PMI policy is paid by the lender and not the borrower. This is typically done in exchange for a higher rate or fee structure on the mortgage itself.
Beneficiaries of mortgage insurance:
In a view of fact that, property mortgage insurance initially offers security to the lenders, this means that lenders are the first to achieve benefit from such mortgage insurance.
Homeowner’s insurance insures the property: dwelling, personal property, other structures on the property, etc. Private mortgage insurance pays the mortgage in case of the death or disability of the mortgagor.