Buying a home should be one of the momentous events of your life. When you find the perfect property you will need to jump through several rings to get a mortgage. Some homebuyers are required to buy homeowners insurance, while others choose to buy homeowners insurance – there are two distinct products. Before investing in any mortgage insurance, find out the facts and avoid these myths:
Mortgage insurance is life insurance.
Life insurance for mortgages pays off your mortgage if you die before you have paid off your mortgage. Young families who have just bought a first home should consider what would happen if a partner dies. It is important to know the difference between life insurance and home insurance. Life insurance for mortgages protects the home buyer and can be the best type of insurance for home buyers who can not qualify for life insurance. If you are in good health, you can buy a life insurance policy with a death benefit that will pay off your loan, plus provide financial support to your loved ones.
Mortgage insurance protects you if you neglect.
If you bought a home with a down payment of less than 20 percent, the lender may have required you to buy a private mortgage insurance policy and may call it “mortgage protection insurance.”; The premiums for these insurances are usually added to your monthly mortgage payment. The insurance protects the mortgagee – not you. If you fail, you still run the risk of exclusion. The advantage of this insurance is that you can buy a house with a small down payment. These insurance products vary in cost, and it is worth finding an insurance policy at the lowest monthly cost.
Mortgage insurance is expensive.
You may be surprised to find that homeowners insurance is generally affordable. The cost of your home will affect the amount paid in premiums, and if you pass away, the death benefit will be transferred to the mortgagee, not your loved ones, to pay off your mortgage in full.
All mortgage protection policies are the same.
Every mortgage protection policy is different. Some insurances work as life insurances, which pay off your mortgage, while others simply protect the mortgage company if you fail. The cost of premiums also varies. If you need to have a mortgage protection insurance, why not look around and get the best rates?
If you want a mortgage life insurance to protect your family if you suddenly pass away, you need to understand the fine print of the policy. Some insurances will only pay a death benefit if you die in an accident, not for natural reasons. Talk to a local insurance agent so you understand your policy before committing.
Your family is the beneficiary.
Depending on the type of insurance, your mortgage protection policy will pay the death benefit to the mortgage company, not your loved ones.
You need to be in good health to buy mortgage protection.
Many people buy a home insurance as they have a health condition that makes it impossible to be approved for life insurance. In most cases, you will be asked health questions but will not have to undergo a medical examination to qualify for a life insurance mortgage. Life insurance can be a better option for insurance if you are in good general health.
Always seek the help of a local insurance agent who understands the features of the different types of mortgage protection before you buy. You can save significant amounts of money with a little help and your family will be better protected.