As you progress through the home buying process, the question of insurance will be raised. Here are the basic types of insurance you should know something about. Be aware that most policies contain standard exclusions and exceptions.
Homeowner's insurance covers fire, theft, certain natural disasters and personal liability if someone is injured on your property. It protects the lender against the loss of the property securing your mortgage. You'll have to prove that you have adequate homeowner's coverage as a condition of obtaining a mortgage.
MidWest Financial Credit Union has relationships with the following vendors to help our members with their Homeowner's Insuance need:
AAA Insurance Company 734-973-2800
Dobson-McComber Insurance Agency Inc. 734-741-0044
Visit their website at www.dobsonmcomber.com to find out what types of insurance coverage is important to you.
Title Insurance
Several things happen behind the scenes when you buy a house. For example, MidWest Financial Credit Union will have someone perform a title search to make sure the seller has a legal right to transfer ownership, and to see if there are liens or restrictions on the property. A lawyer, abstractor or employee of the title company does the title search.
Title Insurance provides protection against financial loss in case a defect in the title turns up at some date. Possible defects include:
- Flawed information in deeds or mortgages (like an incorrect name)
- Liens or claims against the property or the property owner (unpaid taxes or bills for water service)
- Claims to ownership from a former owner or spouse
- Invalid deeds (from a past sale or transfer by a party who didn't actually own the property)
Insurance that may by required
Private Mortgage Insurance
When you aquire a mortgage with less than a 20% down payment, MidWest Financial Credit Union may require you to buy mortgage insurance. This coverage helps protect the lender in case you can't make your payments and default on the loan. MidWest Financial Credit Union isn't the only beneficiary. Mortgage insurance makes it possible for people with small down payment to buy the home of their choice.
Flood Insurance
Flooding is not covered by a standard homeowner's insurance policy. To determine if you need flood insurance, ask your insurance professional about the flood history in your area.
If there is a potential for flooding, you will be required by MidWest Finanical Credit Union to purchase a policy that covers the structure and your personal belongings.
Flood insurance can be purchased from an insurance agent or company under contract with the Federal Insurance Administration (FIA), part of the Federal Emergency Management Agency (FEMA). Flood insurance is available where the local government has adopted adequate flood plain management regulations of the National Flood Insurance Program (NFIP).
Optional Insurance
Mortgage Life Insurace
This coverage can reduce or payoff your mortgage if you die before the loan is repaid. It generally is decreasing term life coverage. The benefit payable matches your mortgage balance. Consider your entire financial picture, not just your home, in deciding what life insurance protection you need.
MidWest Finanical Credit Union has a relationsip with the following vendors to assist members with their various Mortgage Life Insurance needs:
MidWest Financial Investment & Insurance Services Representative - Jon Kabel 734-769-4621 ext. 8549
