Avoid a costly mortgage insurance error - By Vigilis
Shopping for a mortgage and choosing a mortgage lender is not a simple task. Many of us will use a mortgage broker, and we all pay particular attention to the interest rate, the penalties charged for breach of contract as well as the possibility of transferring the loan should we change properties.
But what about mortgage loan insurance?
Before taking out mortgage loan insurance, consider your current coverage.
If you are already covered under a personal policy against life insurance or critical illness, increasing the insured amount to include the mortgage is usually a preferred option. Taking out optional coverage available under your group insurance plan is also a good alternative.
What are the benefits?
In addition to generally lower premiums, coverage obtained on a personal basis has several advantages over plans offered by your financial institution, including:
- You have the option of maintaining your coverage after repaying your mortgage;
- The insured amount is fixed while that of traditional mortgage insurance decreases with the amount owed—without reducing your premiums!
- The beneficiary of the insured amount is not the financial institution but yourself or your designated beneficiaries, providing the freedom to use the funds as deemed fit;
- The coverage is portable: no need to provide new evidence of good health if you change financial institutions.
Before purchasing or renewing your mortgage insurance, take a few minutes to compare your options. The savings are worth the effort!