loan/mortgage repayment via sched xactions: feedback request

Derek Atkins warlord@MIT.EDU
04 Jul 2002 23:37:20 -0400


FTR, what Olaf said is what I meant.  In the US on a Home Loan there
can be Hazard Insurance and, potentially, Private Mortgage Insurance
(PMI).  They are different, do different things, and are even paid
differently.

-derek

Conrad Canterford <conrad@mail.watersprite.com.au> writes:

> On Fri, 2002-07-05 at 11:09, Olaf Faaland wrote:
> > Conrad,
> > "Insurance" : Hazard insurance, covering things like fire, floods, burglaries, 
> > etc.  The property owner is usually the beneficiary (payee), although the 
> > lender will have a claim on the $ if the loan is not paid off.   Here in the 
> > US, the lender requires the borrower purchase this.
> 
> Okay, this is what we call "House Insurance", and it works the same
> here. Our banks also require it, but it is usually a seperate thing to
> the mortgage repayments. I have heard of some banks here offering it on
> a monthly payment arrangement though.
> 
> > PMI:  I can't remember what the acronym stands for, but it's insurance that 
> > protects the lender (the bank) in the event the borrower (homeowner) defaults 
> > on the loan.  The bank is the benificiary.
> 
> Right. This is what we call "Mortgage Insurance", or, more commonly now
> "LMI" - for "Lenders Mortgage Insurance" (some people were getting
> confused about who was protected when it was just called Mortgage
> Insurance, so it appears they're slowly changing what they call it).
> Ours works differently from yours though - if you borrow more than 80%
> of the value of the house you pay a lump sum at the commencement of the
> loan for LMI. There are no ongoing payments. Some banks have been known
> to allow you to lump the LMI into your loan. Some won't. I am not aware
> of any Australian banks that have an ongoing payment style of LMI. 
> 
> > Your question makes me wonder what other, different forms of insurance or 
> > taxes there are out there; and whether the template Josh created is really a 
> > US one.  The ones Josh listed certainly fit my loans.
> > -Olaf
> 
> In this case, it was primarilly a terminology difference. However, we do
> need to be aware that we are writing software that gets used all over
> the world, and some places are just downright strange...  :-).
> 
> Conrad.
> -- 
> Conrad Canterford  (conrad@mail.watersprite.com.au)
> Water Sprite Pty Ltd   |  url - http://www.watersprite.com.au/
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-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
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