Mortgage Protection: How to Buy the Best Mortgage Insurance for Your Home
A mortgage protection policy helps to protect you from the financial consequences of an event, such as disability or death that can prevent you from paying your mortgage on time every month. While it’s essential to have some type of mortgage protection in place, many people don’t know how to buy the best mortgage protection possible.
If you’re one of these people, here are some helpful tips on how to buy the best mortgage protection for your home.
The 3 most important factors
The most important factors when considering mortgage insurance are monthly cost, coverage amount, and loan type.
- Monthly cost – A mortgage insurance premium is usually based on your loan-to-value ratio. Monthly cost should be low, but check with your lender before you apply and shop around because some companies will offer a free service that offers a no obligation quote. Also look out for any caps or limits on monthly costs as these can make a big difference over time.
- Coverage amount – The coverage amount is based on your loan and depends on who issues it (an investor or bank). Find out how much money you need to cover after all debts have been paid in case something happens to you or your partner so there are no financial worries left behind.
- Type of mortgage – Lastly, you need to think about what type of mortgage you have, and whether it’s fixed or variable. This is because there are different levels of cover based on loan types, so check before applying to find out if your loan will affect your cover amount.
Get in touch with our mortgage insurance advisors to know which plan suits you the best.
Value of mortgage coverage – how much do you need?
Different types of mortgage insurance offer different levels of coverage. With a standard mortgage, you are required to have a certain amount of mortgage insurance coverage in order to get approved for financing.
These limits are determined by how much you owe on your home and your age. For instance, if you’re under 65 years old, you may need at least $100,000 worth of mortgage insurance coverage if you owe more than 80% on your home. If you’re over 65 years old, you may need at least $200,000 worth of coverage if your equity is less than 20%.
Know how much coverage you will need – get in touch with our mortgage insurance experts today!