What your referring to is not what the FHA insurance is meant to do.. Mortgage insurance is a policy paid by the borrower on behalf of the lender.. the lender is the beneficiary in case of a default... meaning if the borrower is unable to make payments (death or otherwise) and the payments are not being made, and the lender is forced to foreclose, then once the property is sold and the funds are not sufficient to pay off the loan, then the insurance kicks in and the lender is compensated... what your referring to is credit life insurance.. this is a separate policy where the beneficiary is whomever the borrower designates, and it is intended to pay off the balance upon death... I hope this clarifies things...I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.comMay 10th 2012
FHA mortgage insurance is NOT a death benefit. FHA will insure a small amount of the loan for the lender, which encourages lenders to provide the loan. In the event of default on the loan, FHA will pay a little to the lender. In event of a death, the estate will have to work with the lender to settle - usually in probate. You can buy a insurance policy to pay off a mortgage at the time of death, but they are usually over-priced. Using must cheaper term life policies is much better. www.ReliableInsuranceMN.comMay 11th 2012
Unfortunately, you have a misconception about how FHA Mortgage Insurance works. FHA is providing insurance that prevents the lender from taking a loss in the event the borrower defaults. If you are looking for a form insurance that would pay off the loan in the event of death of one of the borrowers, that is a different type of insurance, commonly called "Credit Life". Credit life is generally more expensive than other types of insurance that are available. You should look for an Insurance agent to provide you with quotes before you commit to purchasing. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ www.LoansA2z.comMay 10th 2012
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