“Should I get mortgage insurance?” Well, in order to answer the question, I believe that you’re really asking, “Should I get insurance to pay off my mortgage in the event that I pass away?” And that is really what I call ‘credit life insurance’ or simply an insurance policy that insures your life and names a beneficiary so that the loan would be paid off at your death. Many credit card companies offer this for a small fee that your loan would be paid off or your balance would be paid off if you pass away.
Sometimes, the mortgage companies will also offer this feature. My suggestion is simply to go online or contact your insurance agent and ask him about a mortgage-term insurance that is guaranteed renewable, say, for a ten-year period. That way, the amount of insurance that would be paid to your beneficiary would be for a level amount. The premiums for term insurance are very small, particularly if you’re under the age of 60, and I would suggest that you check with your insurance agent.
Mortgage insurance is usually what I consider as the mortgage insurance that a lender obtains to insure any amount above 80 percent of the loan devalue. Whenever you obtain a loan and you’re borrowing more than 80 percent of the appraised value, the lender usually requires that you obtain mortgage insurance, which they provide for you, and you have to pay a premium until such time as your loan decreases to 80 percent, at which time the mortgage insurance will drop off. So, that’s about mortgage insurance. I believe that most people, when they think of mortgage insurance, mean that that’s whenever your loan’s going to be paid off in the event someone passes away.
The mortgage insurance the lender obtains does not pay your loan off. It’s only for your lender’s benefit in the event that there is a default under the provisions of your loan. So, if you have any questions, give me a call at (727) 847-2288. I’d be glad to talk to you about it. Thank you.