Mortgage Insurance – Do You Really Need it?
Whether or not you should get your Canada mortgage insured is a battle that rages on. While a lot of experts are all for the advantages of getting your mortgage secured, some do agree that getting a separate mortgage insurance is not the best choice for everyone.
So, what is the final verdict? Should you get separate mortgage insurance when you buy a home or is a simple life insurance enough? Keep reading to find out:
Let’s go through the pros of getting Canada mortgage insurance first.
- First things first, you will be securing your equity and your family, as this insurance is strictly related to your property. This means that in case of your demise, the insurance money will be used to make the mortgage payments and keep your loved ones safe from losing the home even if they can’t make the mortgage payments.
- It is easy to apply for and you can easily get it the time you are applying for your Canada mortgage.
- Mortgage insurance can be easily cancelled at any stage and there are no additional penalties involved.
- Life insurance takes a certain amount of time and verification before you can get it, including physical tests etc. On the other hand, mortgage insurance can be easily filed for when you apply for the Canada mortgage loan and the lender will only take a look at your previous records to finalize the deal.
- If you do not have a life insurance for now and are thinking to apply for it in some time, mortgage insurance can act as a filler and provide you a sense of security.
Though the prospect of mortgage insurance does seem to be attractive and enticing, it is important to know the negative facts as well so that you do not end up paying for unnecessary coverage.
- The mortgage insurance will expire as soon as your mortgage ends, so you will have to reapply for the insurance if you are looking for complete coverage. This means that you will have to be ready for any possible fluctuations in the rates. This renders the mortgage insurance inflexible as compared to life insurance which accounts for the same amount of premium throughout the term.
- The beneficiary for the mortgage insurance will be your lender who will get the money in case you fail to make the payments. On the other hand a life insurance allows you to make any relative of yours the beneficiary who can acquire the money and use it to pay off the mortgage debt and get any other issues in order as well.
- Though it is easy to file for mortgage insurance, it is important that you fill the form in the correct manner. Filling up the form incorrectly may result in your insurance claim being denied when it is needed, making all your hard earned cash that you paid for all those years go to waste.
Though there are both pros and cons of getting mortgage insurance when you buy your home, the end decision depends upon your individualistic needs. Consult a professional or your Canada mortgage broker for more information and guidance so that you can secure your present and your future in the right way!