Does FHA mortgage insurance make payments if I lose my job?

Posted on Oct 20, 2012 in FHA Information

federal home mortgage
by Center for American Progress

Question by Kyle: Federal Interest rate vs. Home Mortgage Rates?
So when the rate is cut how long does it take to reflect the cut for home mortgage rates? I’m thinking about buying a house and I just heard the federal interest rate is being cut to 1% (historic low). When will home mortgage rates reflect this cut? How low on average in % will they go (if its possible to know)?

Best answer:

Answer by Tomas
When they say the feds cut the rate they are not talking about home loan rates. They mean short term loans like cars loans, prescription ed credit cards and such. The mortgage loans are based off of the 30 year treasury bond.. which is why you don’t necessarily see those rates come down when the fed ‘cuts’ the rate.
hope this helps.

What do you think? Answer below!
Question by Jake: Does FHA mortgage insurance make payments if I lose my job?
My brother-in-law lost his job a few months ago and he said his mortgage insurance paid his mortgage and gave him some extra money until he got a new job.
I have an FHA loan and I want to know if I can do the same thing.
If I can, view who do I talk to about it?
If not, is there anything else I can do until I get a job?

p.s. I have already filed for unemployment.

Best answer:

Answer by dusty_titus
FHA doesn’t provide this special insurance for paying mortgage when you lose your job, or suffer an accident. This kind of Insurance must be purchased in advance of any misfortune, and is always the option of any homeowner.

What do you think? Answer below!

4avg.rating 17 votes.

2 Comments

  1. No…this insurance is only for the lending institution.

    Copied from Money Alert Website:

    “Private Mortgage Insurance (PMI) is insurance that protects your lender against non-payment should you default on your loan. It’s important to understand that the primary and only real purpose for mortgage insurance is to protect your lender—not you.”

    Your brother-in-law may have purchased an outside insurance in case he lost his employment. FHA PMI does just as stated above.

    Best of Luck

  2. No- for something like this you will need supplemental insurance- like GEICO

    As the other users have stated this kind of mortgage merely insures the bank. Until you have paid down your mortgage 20% Private Mortgage Insurance is part of your mortgage payment. The cost of PMI has gone through the roof the last few yrs because of the level of defaults.
    Here is more on PMI
    http://www.bankapedia.com/mortgage-encyclopedia/residential-mortgage-terms/300-private-mortgage-insurance

    I would suggest contacting your bank and letting them know your situation. If you are able to make partial payments you may get away with having your credit unaffected.