How does mortgage insurance help you?

The importance of mortgage insurance cannot be undermined. It not only increases your purchasing power but also allows you to make lower down payment. In case you are taking out a mortgage, make mortgage insurance a top priority. During the course of your loan term, if you happen to encounter certain unavoidable financial hardship and you start missing mortgage payments, your mortgage insurance can be of immense help. If you lose your job, mortgage insurance can pay for your mortgage payments each month.

This type of insurance has its own terms and conditions and once you have decided to opt for mortgage insurance, select the coverage that suits your needs best. There are certain conditions when you cannot avail mortgage insurance. They are as follows-

• You cannot opt for mortgage insurance if you have resigned from your services.
• You had a career break
• You are expecting
• If you have been compelled to leave your job, you cannot avail mortgage insurance.

Mortgage insurance can be bought by anyone intending to take out a mortgage.

How does mortgage insurance help you?

If you are a first time home buyer, you can benefit from mortgage insurance by making lower down payment. Usually, the amount you are required to make as down payment is 20% of the property price. This acts a safety net for the lenders. If you have mortgage insurance, lenders usually agree to give you a mortgage loan for a down payment as low as 5% to 10% of the property value.

In fact, mortgage insurance gives an assurance to the lenders that you are honestly committed to this investment and that you will be making regular mortgage payments. A lower down payment makes the mortgage more affordable. The payment mode for mortgage insurance is variable. And it can be annual, in split premiums or monthly. The amount you are shelling out as mortgage insurance payments is tax-deductible.