Mortgage insurance

Mortgage insurance is essentially life insurance . Why would you buy mortgage insurance? The only reason is to protect your family in case you die before your loan is repaid.

What are your options?

Accept your Credit Union, Bank or other financial institution 's insurance program.

Or

Subscribe a term life insurance with another insurance company.

This second option will probably cost you less and be more flexible.

If you buy a term one-year or term ten-year renewable policy, you can renew any time independently of health condition.
You can reduce the amount of insurance when your loan decreases.
You keep the insurance policy if you change lender.
Add to that a disability insurance clause that will pay your loan while disable and your are all set.

Compare to your lender's program.

Your insurance will be enforced for the term duration, generally up to five years.
The premium is fixed for the duration of the term even if you repay part of your mortgage .
You are paying for nothing because in case of disaster, insurance will pay the balance due on your loan, no more.
At the end of the term you may not be accepted for renewal if you have health problem.
If you are accepted your premium will be higher because of age.
If you switch Bank, Credit Union or other financial Institution because of better interest rate, the insurance will not follow and you may lose the advantage of better rate because you will have to stay with the same lender.Check with different insurers, this may make a substantial difference on your monthly payments.

These are the main differences about mortgage insurance. The choice is yours!