Mortgage insurance, how can you save?
While buying a home is a very common occurrence and is usually done quite easily, there are some perks to consider. Have you evaluated all the details and thought about everything your decision entails? Like insurance. Of course, you have to insure your property, including the building. But have you thought about insuring your investment? Because the mortgage is probably one of the biggest you'll ever make.
In this sense, imagine the following scenario. You and your spouse are buying a house together. Two years later, one of you passes away. What happens to the house? One thing is certain, whether there are one or two of you, the mortgage has to pay off anyway.
Mortgage insurance is a kind of life insurance. However, if there is death, the mortgage (if insured) will be assumed by the insurer rather than the spouse or children. This solution therefore represents one way of reducing the burden caused by a death.
The institutional product
From the outset, your financial institution will offer you mortgage insurance to protect your investment. You will be tempted to sign on the spot. After all, you won't have to take any action. It’s so easy! But is it really the best thing for you? In the long run, are there other ways that you can save money while being insured? The answer is yes!
Just because you choose to insure your mortgage doesn't mean you need to do it with your lender. There are different forms of products, in addition to mortgage insurance offered by the lending institution, that can be used to protect your investment.
Term life insurance
The goal of the process is actually to have access to a certain amount that will allow your offspring (or your spouse) to continue living in your home upon your death, if they wish. For that, it is necessary that the said house continues to pay itself! And paying a mortgage on one salary (or none in the case of children) is not always easy.
A perfect solution is therefore term life insurance. The principle? Purchase life insurance for the duration of the mortgage, for the amount you want, which often turns out to be much more than the mortgage balance, and for much less!
However, you can take out life insurance at any time, even if your mortgage is already in force. This solution is therefore completely independent of your commitment to the bank. The other difference is that the reimbursement, on your death, will be made to the beneficiary of your choice and not to the bank. The person can therefore repay the loan or use the money for something else, such as paying other debts, as they see fit.
In closing, Infoprimes emphasizes two very important facts. First, find out about mortgage insurance details (especially if it's from the bank) like the terms, the amount insured, or the interest rate. The more you know, the better informed your decision will be. Also, compare! Not all offers are created equal for the simple reason that your circumstances, your budget and your needs are unique to you. A personalized product will therefore serve you more than generic mortgage insurance.
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