Why You Need To Have Mortgage Insurance

Anyone who has attained the dream of a house of their own will be very anxious to keep it for themselves and their family.

If anything befalls you, either death or disability, you probably want to know that your family will not have the home you have worked so hard to get plucked from them. Insurance policies exist that protect the ownership of the home in case you cannot pay your mortgage due to death or disability. The main kinds of mortgage insurance offered on the market are life and disability.

mortgage insurance

When the primary salary earner’s salary is disrupted, either because of death or a severe disability that stops him from working, usually the surviving spouse could not keep the house.

No one likes to contemplate the idea of their own death, but a good family man will endeavor to protect his family in case of such a tragic occurrence. If a family head is concerned that his or her family will become homeless because of loss of his or her income, the most sensible solution is mortgage life insurance.

A mortgage life insurance policy will pay down the home loan in case of the death of the insured. A decreasing term life policy is the one that most people choose the amount of the benefit decreases over time as you pay down more and more of your home loan balance and the required life insurance benefit is lower.

The other type of popular is disability insurance that will assure that the home loan will be paid, even after the primary wage earner is no longer earning a salary. In the case of disability insurance, the mortgage payments are made while the insured is disabled. Many people have disability insurance at work, but they should find out the amount of this policy, which is not normally high enough to cover all expenses, including the mortgage.

As a matter of fact, mortgage disability insurance may be a more valuable choice than mortgage life insurance because the possibility of a wage earner becoming disabled are higher than of his death.

There is the added issue that many households could not even afford a home if both partners were not employed, and they should have a joint policy. If both of the parties are disabled, perhaps by an accident they were both involved in, the entire mortgage payment would be covered.

Advantages Of Cheap Mortgage Insurance

Because of the unpredictable nature of life, sometimes you may find yourself in a difficult situation facing a home repossession as you were not able to pay out the mortgage loan you took. This could be really heartbreaking as a house is normally something you purchased or built once in a life time. Losing it altogether due to your unpredicted economic trouble is something very painful. However, thankfully, it’s something that we can very easily prevent if we invest some cash in cheap mortgage insurance. Let’s see exactly how it’s possible.

This is desirable because we never know exactly what future holds for us and so there are constant possibilities that the monthly mortgage payments could get blocked if you lose your work due to some illness, a car accident, or through unemployment. This can leave you wondering exactly where to find the cash to pay everyday bills let alone monthly mortgage payments.

Of course, if you have been smart sufficient to protect your home loan with low-cost than you can handle your situation very easily. The cover would begin once you had been jobless for a time of 31 days to ninety days. Policies then continue to pay out for up to 12 months and with some providers for up to two years which could give great satisfaction and protection. Another essential thing to bear in mind while purchasing low-cost mortgage insurance is to make sure that you get them from a professional. One common practice was to buy also at the time of getting your mortgage. It is not a recommended way to buy them.

You do however need to be aware of some facts; for instance, cheap insurance won’t be valid in all situations. Many of these situations are when you are still employed as a part time worker or even you happen to suffer from a pre-existing illness. Obviously, these problems will be printed on the application form you sign, but only that they’ll be printed in really small letters. Therefore, read the small print pointed out in the application form thoroughly before signing them.

In conclusion, the cheap one is a viable asset and a back drop on which you may fall if you’ve suddenly lost your employment. It can help to prevent panic and stress in case the worst does occur. As the saying goes, hope for the best, but be prepared for the worst.

You shop around for your life insurance, home contents insurance, and car insurance, so it only makes sense that you should shop around for your insurance too. Protecting your mortgage repayments in case you should suffer illness or accident or unemployment is just another form of insurance and as such you are able to buy it the same way.

Read also: What to Look for in a Life Insurance Company

When you buy your car the salesman will not try to sell you car insurance at the same time, so when you take on your mortgage you should not be bombarded with mortgage payment protection. However high street lenders frequently try to push cover alongside their loans. Have you ever stopped to consider why they do this; they are not doing it out of the goodness of their heart to save you money that’s for sure. Far from it, in fact, they could be adding hundreds more onto the cost of the borrowing than need be. Premiums for mortgage insurance are notoriously high and you do not have to buy protection at the same time. You might not want protection or you might not be eligible for it, all of these things need considering before buying. If you do decide protection is suitable and want it, then shopping around will allow you to save money, while at the same time ensuring you get a quality product.

The cost of insurance will also vary with independent providers, so getting several quotes before choosing your cover is imperative. The cost of cover will also depend on the level of protection you want. You can protect your mortgage for all three eventualities that might mean you are unable to work, accident, sickness, and unemployment. However, you might not need all three and providers will allow you to take out individual cover. A policy can be taken if you just want protection against becoming unemployed by such as redundancy. You can also take stand-alone accident and sickness mortgage protection.

Mortgage insurance does an excellent job of helping you to keep the roof over your head if the unexpected does happen. The insurance would allow you the peace of mind of knowing that your mortgage repayments remained safe. You are then free to search for work again or to make a full recovery from your illness or accident. While you could think that your savings would get you through if you were unemployed or incapacitated if it was for many months they could run out. You could also be under the impression that the State would see you right and provide an income. While State help might be available it is only towards the first £100,000 of your interest for the mortgage. You would also have to wait several months before seeing any benefit and of course, there are many terms and conditions that have to be met for you to be eligible to claim.

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