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Mortgage Insurance

Many people purchase mortgage insurance from the bank when they negotiate their mortgage. In fact many people think that they will not get the mortgage if they don’t purchase the insurance. That is not true.

What is mortgage insurance? It is decreasing term insurance so as your mortgage decreases the insurance payout also decreases. However the cost of the insurance remains the same so in actual fact it is increasing all the time.

Another important point to note is that mortgage insurance is not underwritten at the time of purchase it is underwritten at the time of a claim. As a result if the insurance would have been refused due to health issues,  the mortgage will not be paid and the premiums returned!

A very important point is that if down the road you wish to mortgage shop or change institutions you must hope that your health status has not changed or you won’t qualify for mortgage insurance and it may limit your options for change.

The solution is to purchase your mortgage insurance separately as a stand alone plan which is underwritten at the time of application and that will guarantee your coverage for as long as you need it.

For a complementary quote contact us.