You are signing for your first home purchase and the necessary mortgage on the new homestead. You plan to make every payment for the next twenty to forty years on time. But what happens if, just if, you can’t because you die? It’s a very unpleasant but real consideration you should consider before signing those papers on the dotted line. You have health insurance, automobile insurance, and a real life insurance policy and some term life as well. Now is the time to check out mortgage life insurance. It is just like a will, good business in planning your estate.
What is mortgage insurance? It isn’t based on default risk; it’s based on down payment and mortgage amount. A big benefit of getting it is that it allows you to put a smaller down payment down than the standard 20%+. It is comparable to some term life insurance policies except its rates are lower.
It is a policy that protects the lender, meaning the bank of financial institution, that is lending you its money. It is not a fixed sum. It usually is non-tax deductible. The amount of insurance declines with every payment on your property. Your death satisfies all debts and cancels any claims against your home. The lender is gone, and your home is paid off and clear.
Something to think about…
on Jul 26th, 2009 at 8:59 pm
Thanks Val, this is good info.
on Jul 26th, 2009 at 10:33 pm
Heather,
A pleasure to inform.
Pat.