Mortgage loan insurance protects lenders against mortgage default and allows consumers to buy houses with a 5% down payment and interest rates equivalent to those given with a greater down payment. Lenders pay an insurance fee to acquire mortgage loan insurance. This expense is often passed on to you by your lender. The premium is determined by the loan-to-value ratio (mortgage loan amount divided by the purchase price). The premium of a mortgage loan insurance Calgary can be paid in a flat sum or applied to your mortgage and rolled into your monthly payments.
Let us take a look at the key benefits of it:
- Ensures The Protection Of The Family Against Unexpected Debt
If a family member dies unexpectedly and that person was repaying the debt, the family is obligated to reimburse the outstanding loan amount. If the family is unable to do so, the bank will seize the residence or collaterals used to secure the loan in order to repay the outstanding loan amount. This problem can be averted if there is home loan protection available. The family must claim the debt protection amount covered by the policy. Despite the loss of the loan bearer, the family is not homeless in this situation. As a result, if you wish to safeguard your family, this method is critical.
- Provides Protection For Assets And Collateral Too
If the loan bearer dies, the house and other valuable assets might be confiscated to satisfy the outstanding debt amount. Even if the family members are successful in saving the house, they will lose their treasures. In this instance, home loan protection plans safeguard the assets by repaying the outstanding loan amount. As a result, even if the loan bearer dies, it assures that the family’s level of life is not jeopardized.
- Together with the home loan, this product is available
Because of the abundance of identical items on the market, buyers are frequently perplexed. House loan protection is typically provided in conjunction with the home loan. The financial institution from whom the loan is being approved will have a variety of home loan protection programmes available to you. It is not, however, required to purchase these schemes, and you always have the choice to obtain the plan either concurrently with the loan or subsequently from a different supplier. The option is entirely yours!