JUST SAY NO!
Home buying is full of decision-making. You are bombarded with questions, options, choices every step of the way. Well, I'm here to help make one of those decisions super easy for you.
Just say NO.
Whenever you get a mortgage, you are presented with the option to obtain Mortgage Insurance. Mortgage brokers and banks are obligated to pitch this to you, and it can be seen as an easy option - no blood tests, no home visit from a nurse, etc. It's simple - just initial the box, and boom - you're insured. Easy, right? Have you ever wondered WHY that is? I mean, why doesn't everyone do this, and avoid peeing in the cup and answering the uncomfortable 'lifestyle questionnaire' that the other insurance companies want you to answer? Because mortgage insurance is set up protect the bank, not you!
JUST SAY NO!
Here's a table comparing Mortgage Insurance and Life Insurance, provided by my good friends at ThreeSixtyFinancial. Have a look, and the next time you are asked whether or not you want Mortgage Insurance, you know the answer… (hint: it's in the title).
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BANK MORTGAGE INSURANCE |
PERSONAL LIFE INSURANCE
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| The bank owns the policy
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You own the policy
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| The insurance amount can only be the exact amount of the mortgage
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You may select any amount of coverage
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| The bank/lender is the beneficiary
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You choose the beneficiary
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| Outstanding balance of the mortgage balance is paid upon the death of the insured
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Proceeds are paid to the beneficiary upon the death of the insured and can be used as they choose
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| Amount of coverage decreases as mortgage decreases, although premiums remain the same
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Coverage remains constant and can be increased or decreased as you choose the premium will reflect the new coverage amount
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| You need to re-qualify for insurance if your mortgage is re-financed or you change lenders. Your premium will be based on your new age
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You never have to re-qualify for coverage
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| Coverage terminates when your mortgage is paid off
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Coverage remains in place even after your mortgage is paid off
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| Coverage is NOT convertible to permanent insurance
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Coverage IS convertible to permanent insurance
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| If both insureds die together, only the mortgage balance is paid off
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If both insureds die together, the benefit is doubled
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| Generally no distinction is made between smokers and non-smokers and premiums are the same
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Your rates are based on your health, if you lead a healthy lifestyle, you will be rewarded with considerably lower premiums |