Have a mortgage on your home or considering one? Maybe it is time you consider mortgage protection insurance, sometimes also known as mortgage protection life insurance, in the event that you lose your job or financial security because you know, times can get rough out there.
So what exactly is mortgage protection? It is an insurance that will cover partial or all of your monthly mortgage bill in the event that you lose a job or have a health crisis. In the event that you pass away, most mortgage protection insurances will pay off all of the bill, an extra protection in case you want to leave your home as inheritance for a loved one. While your lender may offer this sort of insurance, it is often best to shop around as many independent companies also offer protection. Compare policies to see which one is best for you. Be aware that mortgage protection insurance is not a part of the whole mortgage package so make sure you ask about these policies when inquiring about a mortgage or loan.
Also note, that policies are going to differ based on each individual. As with life insurance, mortgage protection takes into account age and overall health amongst other criteria such as the current value of your home. Also take note, that while mortgage insurance protects the lender in case you as the borrower default, mortgage protection insurance protects you as the borrower in case of a change in finances, health or death. Sounds like a good deal right?
While this type of insurance is beneficial for seasoned home buyers or first time buyers as well, it may not be necessary to purchase if your mortgage rate is very small, meaning you can pay it on your own with the right type of budgeting. Furthermore, this protection insurance has a declining value over time meaning it only pays the payoff amount on your mortgage that goes down monthly. To top it off, despite this, you will still have to pay the same monthly premium. While there are pros and cons to purchasing mortgage protection insurance, make sure you do the research to see if it may be the right option for you as you make the decision to secure and invest in your home.
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