Mortgage Protection Insurance Provided By Our Agency
You might be wondering why you need Mortgage Protection Insurance. The answer is simple. Suppose something unfortunate happened and your mortgage payments can’t continue as usual. In that case, the insurer will take over those responsibilities on your behalf until everything resumes functioning normally again!
What Is Mortgage Protection Insurance ?
MPI is a type of insurance policy that helps your family make your monthly mortgage payments if you – the policyholder and mortgage borrower – die before your mortgage is fully paid off. Some MPI policies will also offer coverage for a limited time if you lose your job or become disabled after an accident. Some companies call it mortgage life insurance because most policies only pay out when the policyholder dies. Most MPI policies work the same way as traditional life insurance policies. Every month, you pay the insurer a monthly premium. This premium keeps your coverage current and ensures your protection. If you die during the term of the policy, your policy provider pays out a death benefit that covers a set number of mortgage payments. The limitations of your policy and the number of monthly payments your policy will cover come with the policy’s terms.
Why get Mortgage Protection Insurance ?
Mortgage life insurance may benefit people who don’t qualify for term life insurance because of poor health since this kind of policy is typically sold without underwriting. But like any other policy, candidates should seek quotes from several companies and check each firm’s financial strength rating with AM Best, a rating company that ranks insurers with letter grades. Those who want to avoid declining-payout policies should opt for no-medical-exam term policies with level premiums and level death benefits. Although these policies cost more and may offer lower coverage than term policies that review medical histories and conduct physical exams, at least they’ll pay the same benefit, whether you die 10 or 25 years into your mortgage. Another possibility is to acquire a policy that offers more coverage for a cheaper price earlier in your mortgage term. Once you’ve paid down the principal significantly, consider switching to a guaranteed issue term policy.
Loan types and mortgage insurance?
Conventional loan If you get a Conventional loan, your lender may arrange for mortgage insurance with a private company. Private mortgage insurance (PMI) rates vary by down payment amount and credit score but are generally cheaper than FHA rates for borrowers with good credit. Most private mortgage insurance is paid monthly, with little or no initial payment required at closing. Under certain circumstances, you can cancel your PMI.
Federal Housing Administration (FHA) loan If you get a Federal Housing Administration (FHA) loan, your mortgage insurance premiums are paid to the Federal Housing Administration (FHA). FHA mortgage insurance is required for all FHA loans. It costs the same no matter your credit score, with only a slight increase in price for down payments less than five percent. FHA mortgage insurance includes both an upfront cost, paid as part of your closing costs, and a monthly cost, included in your monthly payment.If you don’t have enough cash on hand to pay the upfront fee, you are allowed to roll the fee into your mortgage instead of paying it out of pocket. If you do this, your loan amount and the overall cost of your loan will increase.
US Department of Agriculture (USDA) loan If you get a US Department of Agriculture (USDA) loan, the program is similar to the Federal Housing Administration, but typically cheaper. You’ll pay for the insurance both at closing and as part of your monthly payment. Like with FHA loans, you can roll the upfront portion of the insurance premium into your mortgage instead of paying it out of pocket, but doing so increases both your loan amount and your overall costs.
Department of Veterans’ Affairs (VA)-backed loan If you get a Department of Veterans’ Affairs (VA)-backed loan, the VA guarantee replaces mortgage insurance, and functions similarly. With VA-backed loans, which are loans intended to help servicemembers, veterans, and their families, there is no monthly mortgage insurance premium.
Already have Mortgage Protection Insurance? Switching is easy
It might be time to switch insurers whenever the service that your existing insurer provides doesn’t meet your needs. For example, if you have a poor claims experience or an unexplained rate increase, it might be time to consider other options
If you cancel a previous policy before a new policy is effective, you could run into some serious financial problems.
Contact us today to help you with multiple options to choose from.
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