Mortgage Rate News

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One of the more common occurrences related to mortgages is the need for Primary Mortgage Insurance (PMI). This is important to mortgage lenders who are concerned when you have less than 20% down. Some use a piggy-back mortgage to help avoid PMI, taking out a loan for 20% of the purchase price. While this piggy-back method can help you avoid paying Primary Mortgage Insurance, the higher interest rate charged on the piggy-back loan can sometimes negate the value, since the piggy-back loan is often for 3o years. (You can get rid of this loan by refinancing, paying it off early, or getting a shorter term on the piggy-back mortgage.) Before deciding that this is the way to go, it is best to run a few numbers and see whether getting a piggy-back loan would really result in a savings overall.

Here is what Investopedia has to say about PMI:

The PMI payment is usually paid monthly as part of the overall mortgage payment to the lender. Over several years of paying on the loan and once the borrower has paid enough towards the principal amount of the loan (to cover the 20%), they can contact their lender and ask that the PMI payment be removed. Many borrowers either forget or do not know that PMI can be removed once the accepted level is achieved.

It is a good idea to see where you stand every so often. While you may have to wait for an appreciation in home value to help you in your efforts, this is one way you can speed up the process. In the end, you should keep an eye on things, though, and make sure that the PMI payments are properly removed when you have enough equity in your home. The different can mean thousands of dollars saved over the life of your loan.

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There are lots of ways that insurance companies can try to avoid paying out claims. Everything from flood damage to papers that you sign without looking at them can lead to complications from getting your home insurance claim paid during a natural disaster. Consumer Reports offers these steps to helping you get what the insurance company owes you:

1. Make a list of your possessions: This is better done ahead of time. A home inventory stored in a safe place (like Google docs) that can be accessed from anywhere is helpful. Even better if you have photos.
2. Document the damage: Make sure to take pictures of the damage.
3. Document your efforts to mitigate it: After you have taken pictures of the damage, make efforts to mitigate it, such as running a fan to prevent mold growth and using tarps. Take pictures of your efforts and save receipts from related expenses.
4. Document contact with your insurance company: Write down the time and date you have had meetings, on the phone or in person, with insurance agent, adjusters and customer service personnel. Note what was discussed and who you spoke with. Also, note any missed appointments and untoward behavior.
5. Watch out for the paperwork: Some companies will ask you to sign for an “upfront” payment. Before adding your signature, double check to make sure that this isn’t also a final payment. That could cause problems. Also avoid signing anything that indicates that your home damage is all from floods.
6. Consider a public adjuster: This is someone you hire. You might have to pay 10% of the insurance payout, but you usually get more out of the company — especially if the company is balking at your claim. You want to make sure that any adjuster that comes (even the insurance company adjuster) has the proper credentials. And make sure that you get a copy of the report.

Having back up information and good documentation can help you if you want to prove your case.