How to Choose Unemployment Mortgage Insurance

If you own a home, the possibility of losing your job in this economic downturn may be even more stressful with the thought of a monthly mortgage looming over your head. By obtaining unemployment mortgage insurance, you may find relief for several months while searching for a new job. Understanding the policy's conditions before you sign up, however, can help you avoid costly mistakes and ensure the insurance is available when you need it. Consider these tips to choose unemployment mortgage insurance.

Instructions

1. Find a reputable mortgage insurance company when trying to choose unemployment mortgage insurance. Consult the company that holds your current homeowner's insurance policy, for example. You current home loan lender may also offer mortgage unemployment insurance at lower rates.

2. Consider the duration of the unemployment mortgage insurance to determine if it's worth your while. Job-loss insurance policies typically cover six months of mortgage payments. If you're confident that you'd be able to find a new job before your emergency funds run out or have a reliable source who would lend you money through the shortfall, paying the extra insurance premiums may not be worth it.

3. Compare the conditions to help choose unemployment mortgage insurance, including the maximum monthly and total benefit. Find a policy that will cover your entire mortgage payment, particularly if you have your property taxes built into the monthly payment. Other policies, for example, won't cover interest, which can be a substantial part of your payment.

4. Look at the conditions that will enable you to enact the unemployment mortgage insurance. Some policies won't pay if you were laid off due to a disability or if you're not working because of an extended union strike, for example.

5. Think about your current job situation before you choose unemployment mortgage insurance. Some policies will only cover your mortgage payments if you've held the policy longer than six months before you've lost your job. If you've already received a pink slip, for example, it may be too late to obtain a mortgage unemployment insurance policy that would help you immediately.