Congratulations on your decision to fulfill your dream of home ownership, & I know you can't wait to click on through to the online mortgage quote link. But wait! There is one other thing you need to consider. Mortgage payment protection insurance.
A mortgage isn't like a car where you finance it for up to five years and then trade it in for another car. A mortgage is one of life's most expensive and emotional investment. We're talking up to 30yrs...not just 3yrs-5yrs. Since it is such a long term commitment, you really need to consider what happens in the case of an unforeseen incident.
This is what the purpose of obtaining this coverage is all about. Some policies will include critical illness (ex: strokes, hart attacks, etc) along with traditional life insurance. This subject makes me think of one of my previous lives where I was an insurance agent for about 5yrs (I still have nightmares about that time period).
If you simplify the transaction, you'll see that a mortgage payment protection policy is just a term insurance policy with added riders. The riders being accident, sickness, and/or unemployment. One of the biggest mistakes I see home owners make is not shopping for better rates and coverage. Most of the time, when dealing with the life coverage portion, lenders will only offer a policy that covers your mortgage balance. This type is called a decreasing term policy. Its designed to mimic your home mortgage., Since the amount outstanding on your mortgage decreases with time, so will the amount of your life insurance. Its a strange situation. Your coverage amount decreases, but your monthly payment remains the same.
Here's a better option. Ask for a quote on their policy with the same riders, except ask for a level term policy. This type of insurance policy's coverage stays level for entire term and usually the cost isn't that much more than a decreasing term. Before accepting any mortgage payment protection quote, search the Internet. Many people have found prices that were 50%-60% cheaper!
