Can Mortgage Insurance Be Written off?
What it means is that the lender doesn’t count the money you owe them as an asset of the company anymore. Its financial statements will reflect that change. They’re required to write off certain bad loans so as not to mislead investors. So your debt was just written off of one credtitor’s books. It hasn’t gone off and died, however.
Do you need mortgage insurance if you can’t afford a down payment?
Some people have lots of money for a down payment. For everyone else, there’s mortgage insurance. If you have already determined that you can’t afford a standard down payment on a home (usually 20% for conventional loans) but you still want to buy, don’t despair. Mortgage insurance exists to help make you a more attractive candidate to lenders.
What happens to the money from mortgage protection insurance?
With mortgage protection insurance, however, the lender is typically the beneficiary, and it uses the money to pay off the debt. There’s no flexibility whatsoever. That means your family doesn’t have the option to use the coverage to pay for funeral costs or replace your lost income.
