WASHINGTON – April 11, 2011 – To provide piece of mind to homebuyers, some builders and lenders are offering insurance programs that cover a borrower’s mortgage payments for as long as six months during the first couple years of the loan in the event of unemployment.
While borrowers don’t generally pay anything upfront for such coverage, they should understand the restrictions. Some of the policies place a ceiling on how much will be covered each month, while others limit payments to only principal and interest.
The plans often do not cover self-employed or temporary seasonal workers, and borrowers typically must be eligible for unemployment benefits and apply for them in a timely manner in order to qualify for job-loss insurance. Borrowers may have to wait 60 days after closing for the coverage to kick in, and they may have to be unemployed for 30 days before the program makes any payments.
Additionally, borrowers sometimes must start paying the premiums themselves after a specified period of time.
Most unemployment insurers don’t work directly with homeowners, but rather through the participating lenders, builders, state housing agencies and mortgage insurance firms.
Source: Washington Post (03/26/11) P. E2; Harney, Kenneth R.
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
While borrowers don’t generally pay anything upfront for such coverage, they should understand the restrictions. Some of the policies place a ceiling on how much will be covered each month, while others limit payments to only principal and interest.
The plans often do not cover self-employed or temporary seasonal workers, and borrowers typically must be eligible for unemployment benefits and apply for them in a timely manner in order to qualify for job-loss insurance. Borrowers may have to wait 60 days after closing for the coverage to kick in, and they may have to be unemployed for 30 days before the program makes any payments.
Additionally, borrowers sometimes must start paying the premiums themselves after a specified period of time.
Most unemployment insurers don’t work directly with homeowners, but rather through the participating lenders, builders, state housing agencies and mortgage insurance firms.
Source: Washington Post (03/26/11) P. E2; Harney, Kenneth R.
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
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