What Is Mortgage Hazard Insurance?

If you’ve got a mortgage or you’re currently looking to get one you may be wondering, what’s mortgage hazard insurance, and how could it benefit me? 

Keep reading to find out.

What Is Mortgage Hazard Insurance?

This type of insurance is used to protect you against the unexpected during the life of your loan. When you get a mortgage you put down a deposit of money with the lender. Typically, the deposit is enough to cover the cost of the property, or, it might be paid back in instalments or monthly payments over a certain time. But what happens if you lose your job or go bankrupt? You could lose your home and face repossession. Or you might get a home that is worth less than the deposit you paid.

How Does It Work?

You probably want to know how mortgage hazard insurance benefits you. Well first of all, it protects your loan against fire, storm, hail, and other types of damage. That may sound rather basic, but it’s quite important to know. Most mortgages allow the lender to withhold a part of your payment should a mortgage hazard occur. That can prove useful if you’re considering taking out a mortgage. When you take out a mortgage the lender usually provides you with a fixed amount of money for a fixed term. Your lender can choose to withhold a portion of that amount if it doesn’t like the condition of your property. The property damage is usually in the form of either damage to your property or the cost of repairing the damage.

What To Do If You Already Have a Mortgage

This type of hazard insurance protects your lender if you fall into debt and lose your home. If you’re thinking of remortgaging, then be sure to speak to your lender about any special requirements you may need to meet before taking up the deal. Here is some key information you need to know before remortgaging: 

  • When is this type of insurance policy available? Mortgage insurance can be provided for up to 90 days prior to a remortgage. You’re advised to insure against mortgage default within 90 days This insurance is only available if your existing lender is approved to provide it. It can only be provided to you by the lender you’re switching to, not by your existing lender. 

Contact Zech Buys Houses

Rather than go through the hassle of getting mortgage hazard insurance for your property, why not just sell it instead? Make things simple and contact Zech Buys Houses today to see what we can do for you. We buy houses in Colorado Springs, Colorado, in all shapes, sizes, and conditions fast and in cash so you don’t have to go through the struggle of trying to sell an unwanted property in an unforgiving housing market. Call us today to receive your fair, written, no-obligation offer, and you could have money in hand for your rental property in as little as seven days.

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