Both mortgage insurance and life term insurance essentially serve the same purpose. However, there are some important differences. Each comes with advantages and disadvantages. It’s important that consumers do their research and understand these differences before selecting a policy.
Thinking of buying a home? You’ll probably first need to get approved for a mortgage. To improve your chances, there are a variety of things that you can do. Being prepared will help you show the lender that you are ready and able to take on a mortgage. Below are some tips to help you increase your chances of being approved for a mortgage.
If you or your spouse ever have to use your mortgage insurance, will your claim be denied? If you got it from the bank, there is a distinct possibility that it will.
Mortgage insurance is actually just a life insurance policy based on the value and length of your mortgage. Its purpose is to pay off the remainder of your mortgage if you or your spouse should die. The surviving party then would not have the burden of paying off the mortgage on their own. The benificiary is the bank (not your spouse) and the value of the policy diminishes as you pay down your mortgage.
If you own a home, mortgage insurance is a given. (We hope!) But what kind of company have you trusted your policy with? People often choose the bank for mortgage insurance because they think it's easier and less time consuming; when in fact, it could be a costly mistake for everyone in your household. Let's take a look: