Why are more and more consumers saying NO to bank’s mortgage insurance????????
Quite simply, individual or joint 10/20 year term insurance is a fundamentally better option. Why?
- If you intend to pay off your mortgage quickly, your bank insurance premium will be relatively high for a rapidly reducing amount of insurance. Individual insurance policies maintain the same coverage for a level premium.
- If you renew your mortgage at a different institution to take advantage of a lower rate, you can’t take your mortgage insurance with you. You need to re-qualify, at an older more expensive rate.
- You own the insurance plan and retain control of it, not the bank!
- Your premium and coverage will not change for 10/20 years. The bank’s premium will change when you renew your mortgage, usually every 1 - 5 years.
- If you have other insurance needs you can combine all the amounts into one larger policy, which is more cost effective.
- Individual term insurance can be converted to permanent insurance at the amount (or less) that you initially qualified for, even if your health situation worsens over the years. Mortgage insurance is not convertible and therefore lessens your options when you get older.
COMPARE THE DIFFERENCE
The above information was written by one of our financial planning partners. For more information about mortgages or home refinances, contact Nelson Sousa.