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Path: utzoo!linus!philabs!cmcl2!harvard!think!ima!johnl
From: johnl@ima.UUCP
Newsgroups: net.invest
Subject: Re: On the Worth of Mortgage Insurance
Message-ID: <109000011@ima.UUCP>
Date: Thu, 7-Nov-85 22:00:00 EST
Article-I.D.: ima.109000011
Posted: Thu Nov  7 22:00:00 1985
Date-Received: Sat, 9-Nov-85 06:31:19 EST
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Nf-ID: #R:decwrl:-113700:ima:109000011:000:1055
Nf-From: ima!johnl    Nov  7 22:00:00 1985


/* Written  2:39 pm  Nov  6, 1985 by traite@wanginst in ima:net.invest */
> I don't have a house or a mortgage, but from the discussion on net, it
> seems that mortage insurance will only pay the balance of the mortgage due
> to the holder of the mortgage, AFTER ASSETS, OF THE MORTGAGE TAKER, I.E
> THE HOUSE, HAVE BEEN EXHAUSTED (SOLD).

No, mortgage insurance pays off the balance of the mortgage so that the
bereaved survivors don't have the extra misery of being kicked out of
their house.  But as I said before, if that's something you want to be
prepared for (and if you're the only moneymaker in your family, you might
well) you should increase your regular life insurance to cover the amount
of the mortgage due, rather than taking out a special policy just for the
mortgage.  It'll cost less and give more flexibility.

John Levine, ima!johnl

PS: If the bank reposesses the house, sells it, and it still doesn't cover
the mortgage, that's the bank's tough luck, and it suggests that they were
pretty dumb to lend more than the house was worth.