Primary mortgage insurance
A mortgage or similar debt refers to all forms of debt where the property is pledged as security for payment of the debt. It includes such debt instruments as deeds of trust, trust deeds, mortgage bonds, and vendors liens. In the first three arrangements, usually a third party, known as the trustee, holds the title to the property until the debt is paid. In the vendor lien arrangement, the title is kept by the buyer but the seller reserves, in the deed to the buyer, a lien on the property to secure payment of the balance of the purchase price. Also included as a mortgage or similar debt are contracts to purchase, land contracts and lease-purchase agreements where the title to the property remains with the seller until the agreed upon payments have been made by the buyer.
HOME EQUITY LOAN:
A unit was considered to have a home equity loan, if the respondent reported that one or more of the mortgages were a home equity loan.
PRIMARY MORTGAGE:
A mortgage is primary if it is the only one on the property. If two or more mortgages exist, one was designated as the primary mortgage. Detailed information on mortgages was collected in the AHS on the first two mortgages reported even if the unit had three or more mortgages. On the basis of this information, one of the first two mortgages was considered to be the primary mortgage. The definition of the primary mortgage may not in all cases totally agree with legal definitions of a first mortgage.
The following hierarchy was used to determine primary mortgage:
2. If neither mortgage was a VA, FHA, or FmHA mortgage, an assumed mortgage was considered to be the primary mortgage.
3. If none of the above conditions existed, the mortgage obtained the year the home was purchased was considered to be the primary mortgage.
4. If both mortgages were obtained after the year of purchase, the one taken out first was considered to be the primary mortgage.
5. If all the above failed to designate a primary mortgage, the mortgage for the largest initial amount borrowed was considered the primary mortgage. All other mortgages were considered to be secondary.
TYPE OF PRIMARY MORTGAGE:
Mortgage insurance is financial protection provided to the lender in case the borrower fails to keep up the required mortgage payments and defaults on the loan. Such insurance protection is offered by both the Government, acting as an insurance agent, and by private mortgage insurance companies. The Federal government agencies that currently insure or guarantee mortgages or similar debts include the Federal Housing Administration (FHA), the Veterans Administration (VA), and the Farmers Home Administration (FmHA). The Farmers Home Administration provides much the same service as the FHA but continues its assistance to rural areas. The VA guarantees or insures loans under the Servicemens Readjustment Act. Mortgage loans that are not insured by the FHA, VA, or Farmers Home Administration are referred to as conventional mortgages. Conventional mortgages and mortgage debts insured or guaranteed by State or Local government agencies are known as Other types.
PROPERTY INSURANCE:
The households property insurance on the structure and its contents, such as furniture, appliances, clothing, etc., and usually contains some liability insurance to protect occupants should visitors have an accident on the premises. Renters usually have household property insurance. The total cost is the most recent charges for the 12 month period preceding the interview for which the occupants have actually been billed. Yearly cost was divided by 12 before calculating a monthly median cost. Medians for property insurance are rounded to the nearest dollar.
Other Articles
