What is Private Mortgage Insurance?
There was a time when most mortgage lenders required Private Mortgage Insurance (PMI) only for buyers who were obtaining loans with little money down. Now, most banks require PMI from all mortgage-holders.
PMI compensates the mortgage lender if you default on the mortgage. It generally costs about $500 a year.
Although you pay, you do not have to shop for it. It is provided by your lender and covered in closing costs and/or your monthly mortgage payments.
Title Insurance
Do you really own the building you just bought? That might sound like a silly question to ask, but as the following case study shows, it might be the smartest question of all.
A case study you can profit from . . .
(see another Case Study You Can Profit)
Three months after Carla Jacobs bought an apartment house and began to fix it up, her attorney called her and gave her some disturbing news. A former partner of the man who sold her the property had just made a claim against her ownership of the property. He said that he had been co-owner of the property. “This guy claims that he owned half the building you bought,” her attorney said.
What will happen to Carla? Granted, the man will probably sue his former partner (see Real estate partnership), not Carla, to recover some the value of the property he claims to own. That could take a long time, however. In the meantime, Carla has to put her renovations on hold and wait until the dispute is resolved. The clock is ticking: she has bills to pay and her property is not generating a cent of income.
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