Is Life Insurance Mandatory For Home Loans?
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63333 POINTSview profilePeggy MaceMost of the U.S.No, Life Insurance is not mandatory for home loans. There is a type of insurance that is required for government backed mortgages, or if you cannot make over a 20% down payment on a private loan. This is called PMI, or Private Mortgage Insurance. It pays the lender if you are unable to pay your mortgage payments. This is different from buying voluntary Life Insurance that would pay off your mortgage if you died.Answered on June 19, 2014flag this answer
37376 POINTSview profileDavid G. Pipes, CLU®, RICP®Business Development Officer, T.D. McNeil Insurance Services, Fresno, CaliforniaWhile life insurance is a very smart thing to own while purchasing a home, it isn’t required. More homes are lost through the death of a breadwinner as are lost through fire or other “specified peril” in a homeowner’s insurance policy. Life insurance to cover the period of the mortgage is fairly inexpensive.Answered on June 25, 2014flag this answer
21750 POINTSview profileJim WinklerCEO/Owner, Winkler Financial Group, Houston, TexasThat is a great question! While it isn't a requirement, it can be very good to have, and can help in securing your loan. A lender will be much more likely to loan you the money for a home if they know in a worst case scenario situation, they will receive the money they'd loaned you. So being able to show that insurance coverage often will help persuade a lender to issue the loan, and often more favorably for you. The lender may also ask for you to get coverage if they feel that there is a great risk of them losing their investment in your home. I hope that helps -thanks for asking!Answered on June 26, 2014flag this answer
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