Even couples with secure jobs and ample income are cautious about taking out a mortgage for a new Orlando home. They understand that getting a new mortgage will obligate them to home payments for a significant period of time. Others worry, especially now, about losing their jobs in an unstable economy. The “what if” game begins, and potential homebuyers know that, if they lose their job, there’s a very real possibility they might lose their home.

Unemployment mortgage insurance gives Orlando home buyers some cover should they ever lose that regular income. It’s a definite relief to many who want to take advantage of the deals available in the Orlando home market at this time, but can job-loss mortgage insurance really help homeowners? Or, is it just another way to swindle the innocent out of hard-earned money?

What is it?

Unemployment mortgage insurance is exactly what it sounds like. Some insurance companies offer an insurance plan to help you pay your monthly mortgage payment should you lose your job. Although it’s been around for years, the big companies, such as Bank of America and GE Casualty, have begun offering it up in the past 10 years,.

How does it work?

Unemployment policies pay all or part of your mortgage payment if your job loss is involuntary, and some pay if you become medically unable to work. Policies vary depending on the provider, but most go into action after a month of unemployment. Most also have a wait period which means they won’t pay out during the first six months after you've purchased the policy.

Maximum monthly benefits, what the policy covers and whether you have to be receiving unemployment benefits are just a few things to look over while researching providers. As usual with anything insurance, make sure you read the fine print.

Is it worth it?

A lot of financial advisors say not to bother with the job-loss mortgage insurance. Take the money you’d be spending on insurance and build a savings account to hold six months worth of payments. However, many first-time home buyers have depleted their reserve funds just to get the house, and may not have the money to put aside.

My advice to you…