Getting to Know Mortgage Protection
A lot of people have home mortgages which they have to pay for every month. In fact, anything we buy, from motorcycles to cars, they all have mortgages we have to apply and pay for. However, if anything happens to the finances of the borrower, they may be left holding more than they could pay for. What is there to protect the borrower and the mortgage from foreclosures or other negative factors?
One of the most popular protection schemes is the mortgage insurance or mortgage protection program. This is just like any other insurance, but this time it covers the mortgage itself, not the borrower.
The insurance works like any insurance, it has to be paid for every month or quarterly, depending on the agreement. And this is renewable every year. However, if something happens to the borrower and they can no longer have the capacity to pay for the monthly amortizations, then the insurance will pay it off for them, in total. This means that the home will be secured from foreclosure threats and the beneficiaries are no longer obliged to pay for it.
Some people are critical of the mortgage protection because they claim it is an unnecessary cost which can be covered by the life insurance of the borrower. They are missing the point – the life insurance is on the life of the borrower, not the mortgage. With mortgage protection, the borrower is guaranteed that if anything drastic happens, the home will remain in the possession of the family clear from loans.
There are different types of mortgage protection and it is best to discuss this with the finance officer or loans officer to point which is most beneficial for your particular case. The option is there, and if it will save you from worries in the future, then this is a risk worth taking.