Things You Need To Know About Mortgage Life Insurance

Mortgage life insurance is a plan that protects heirs if the borrower dies or fails to return the money, owing to the mortgage payments. Unlike a traditional life insurance plan that the heir doesn’t get paid unless the borrower dies, the mortgage life plan allows the repay while the mortgage itself is still in existence. If you are putting some assets as collateral, get the best life insurance policy to cover the mortgage. This is different from mortgage protection insurance that protects the lender. The following is a brief discussion about the features of this insurance.

How to choose a mortgage life insurance

Before buying a mortgage life insurance, you should find out the terms, costs, and benefits of the policy. The policy generally has two lifespans to consider – the lifespan of the policyholder and the lifespan of the mortgage.

There are also two types of mortgage life insurance - decreasing term insurance and level term insurance. In the former plan, the size of the policy gradually decreases with the outstanding balance of the mortgage until both reach zero. Meanwhile, the size of the level term plan doesn’t decrease. You will need to evaluate which coverage will do you a favor.

Benefits of mortgage life insurance
The plan is convenience and it doesn’t need other conditions like credit score or medical record to buy a policy. Mortgage life insurance is the best option for financially stable if you are denied life insurance because of medical insurance. Your family can utilize all benefits from your life insurance policy for bills and other expenses.

4 Questions About Mortgage You Must Ask From The Lender

The thought of investing in a home gives rise to dreams and hopes, and of course, lots of questions. And out of all things, the scariest part for any home buyer is the mortgage. Since your mortgage will stay with you for a long time, it’s important to gather as much information and knowledge as possible on it.

In this post, we have mentioned some questions that you must ask a lender before you consider applying for a mortgage.

What’s the history of the lender?

When it comes to buying a home, you must first figure out which lender are you going to use. There are many players in the mortgage field, including banks, credit unions, mortgage brokers, saving and loans, and finance companies. Ask them how long they have in operation and about their established reputation.

What’s the closing cost?

While you compare lenders, keep in mind that the interest rate is a part of the overall mortgage cost. You will also need to pay the closing costs, which is due at the closing. It’s an important process that officially makes the house yours. Ask the lender to enlighten you with an estimation of the closing costs before you accept the mortgage application.

What fees should you pay upfront?

Many lenders play the trick with buyers by not telling all the fees unless they specifically ask them. Therefore, make sure you ask the full story on the fees before accepting the mortgage application. Ask if there are separate fees for appraising the house, obtaining the credit report, and documentation preparation so that there are no surprises later.

What will be private mortgage insurance costs?

When you make a down payment of less than 20% of the overall home’s cost, the lender will need private mortgage insurance (PMI). This keeps the lender protected in case you default on your home loan. Therefore, ask your lender to get top-level private mortgage insurance in Texas and how can you pay it.

An open discussion with the lender, before filling out a mortgage application, keeps you informed and saved from surprises in the future.