It is unlikely that any mortgage lender will finalize the mortgage long before making sure that you have adequate insurance cover. This is not because the mortgage lender has any deep love for you but only because he wants to safeguard his own interest. Mortgage lenders have realized from the experience that in certain situations many homeowners are comfortable walking away from the property when they go into default. When the real estate boom ended, many homeowners who did not have any value left the property simply walked away from it leaving the lender with the loss.
Not only do you need to take private mortgage insurance because the lender will insist on it it also because you need to safeguard your own personal property. When you take a mortgage insurance, you should choose an insurance policy that covers your home against destruction and damage such as protection against fire as well as protection for your personal assets by taking a comprehensive home insurance policy. We will discuss home insurance in more detail in another section but enough to say now that you should take a complete policy that covers you the best with the largest deductible possible. You should remember that not just home you should insure but your personal belongings as well inside the home such as your appliances, clothes, furnishings etc. because they cost money can be expensive to replace. A comprehensive home insurance can protect you against loss for all of your personal property.
In circumstances where you make less than 20% down payment on the home purchase, the mortgage lender will definitely require you to pay the mortgage insurance and property taxes to him in advance. He may ask for up to 6 months of these payments in an escrow account during the time of finalizing the loan and require you to include these payments in the monthly mortgage payment as well.
In order to get an idea of the private mortgage insurance rate and premium that you are likely to pay, you can begin by calling a few reputable and well known home insurers in your area. You can tell them the area where you are looking to purchase a home as well as the price bracket. The insurance agent should be able to give you a fair idea of the kind of expense you are looking at as home loan insurance.