Mortgage Insurance Plan

Mortgage Insurance Plan
The idea behind mortgage insurance is that if something happens to you or your spouse your loan will be paid off. This is a convenient thing both for you and your bank. The other thing is that most banks and other lenders act like they are doing you a favor by offering you a mortgage insurance plan, but is it so? The thing is that probably you can get a much better deal if you shop around for your mortgage insurance policy by yourself.

Through a third party provider you can choose your own beneficiary, decide how to spend the proceeds if necessary, and cancel the policy at any time. If you decide to accept the insurance policy from your bank you probably won’t be able to do all this because you will be gathered with other borrowers under a group plan.

There are many advantages in the third party insurance policy. One of them is the cost. In fact, you can pay as much as 40% more on your bank’s insurance plan. Partially, this happens because your bank can and probably will increase your insurance payments during the life of your loan; a third party insurance policy’s premiums will not go up in most cases. Another thing is that the policy that you accept from your bank will gradually decrease in value while a third party plan will worth the same during the whole period.

On the other hand, even though it costs more, many people would rather accept an insurance plan from their lending institution since it takes less hassle. One of the choices you have in this situation is to look for an insurance policy on the Internet. There are many organizations that are doing their business on the Internet and can easily get you multiple quotes from different providers so you can choose the one that fits your needs the most.

So if you plan to buy a house, one of important things to consider is your mortgage insurance. Don’t let someone make important decisions for you and don’t pay more than you actually need. Spend some time on finding a suitable third party insurance policy and you will save a significant sum of money in the long run.

© 2010, Jericho Mortgage — Mortgage Insurance Plan