Gephardt: Job Loss Mortgage Insurance Exists, But Not For Everyone
SALT LAKE CITY, Utah — When you think of mortgage insurance, you probably think about the insurance banks make us get when we buy a house. However, a special kind of insurance called job loss mortgage insurance could help a lot of consumers who can’t afford their payments.
Job loss mortgage insurance is just as it sounds: the insurance company pays your mortgage if you lose your job.
Les Masterson with insurance.com said it’s a rare insurance, and it will not cover everyone.
For example, if you work part-time or seasonally, are retired or already unemployed, you cannot get it.
“You have to be a full-time employee,” Masterson said. “It’s really limited to people with full-time jobs who are concerned about what would happen to their mortgage if they ever lost their job.”
Also, like the way car insurance looks at your driving record, mortgage insurance looks at your job stability to determine risk.
“This is expensive,” he said. “Job loss mortgage insurance is very expensive.”
Masterson suggests that it’s likely not a good investment for most homeowners.
“If you have any kind of savings that you can set aside — you know, three months or six months savings — then it might be better to keep doing that, or to try to build toward that,” he said.
If you want to look into job loss mortgage insurance, take a careful look at the terms. Some policies only cover part of your mortgage or will cover you only for a few months of unemployment.
A report from Bankrate.com shows about one out of every seven Americans is losing sleep about making mortgage payments, a statistic that is, no doubt, influenced by the fact that so many Americans are out of work for the time being.