You will hear the word ”insurance” more than once!
To avoid confusion, here are the types of insurance you might encounter in your home buying journey. Note that not all of them are mandatory depending on specific circumstances:
1) Mortgage Default Insurance: This is mandatory if you’re paying less than 20% down payment, and protects the lender in case of default on Mortgage payments.
2) Homeowner (fire) insurance: This is usually required by the lenders and provides coverage for loss or damage to a structure damaged or destroyed in a fire.
3) Mortgage Protection Insurance: This is optional life and/or disability insurance that pays out the full Mortgage balance in case of death, or takes care of the Mortgage payments while the homeowner is disabled.
4) Title Insurance: Some lenders might require you obtain title insurance. The policy provides coverage against losses due to title defects, even if the defects existed before you purchased your home
