Mortgage insurance is a very common term which is common mostly among homeowners who take loans from the banks in exchange with the rights of their property. Your mortgagee will surely discuss all the ins and outs with you. But there are various aspects that you must know before proceeding with this plan.
It is always a smart approach to have a clear understanding of mortgage insurance to prevent yourself from future troubles. Here is a sneak peek into some useful information that can benefit you while contracting for mortgage insurance:
Accession to Mortgaged Property
Are you planning to build some extra rooms to the mortgaged property? Want to add some more space to your property? Here is something you must know before proceeding. Your mortgaged property is under the right of the mortgagee. If you build any further rooms or extend the construction on the mortgaged property, then the mortgagee would also acquire the rights over the accession as well. You cannot exclude the extended section of the property from the contract.
Not too many homeowners are aware of this basic clause. All the add-ons to the mortgaged property fall under the right of mortgagee.
There is No Such Thing as “The Perfect Mortgage Insurance”
This is the first thought that comes to the mind of homeowners. Which mortgage insurance is the best? There is no one-size-fits-all mortgage insurance. It totally depends upon your needs and requirements. Every plan has a different set of benefits and clauses. There is some basic coverage that all mortgage offer which includes the coverage of borrower in case of death, permanent disability, or any other unexpected financial crisis.
Give a serious consideration to your requirements and choose the mortgage insurance that resonates with your requirements. The policy offering maximum coverage benefits to you shall be your prime choice.
Mortgage Insurance Claims are Only Acceptable Under Certain Conditions
Make no mistake, you cannot make a mortgage insurance claim simply because you mismanaged your finances and now you are in financial troubles. Don’t expect the mortgagee to handle these situations and assist you in home loan instalments. Your mortgage insurance claim only covers your inability to pay home loan instalments in case of your death or permanent disability.
The prime beneficiaries, in such a case, would be your family members. They would be given a lump sum payout to deal with the outstanding home loan.
You Don’t Necessarily Need to Get a New Plan While Moving to a New Home
MRTA allows homeowners to continue with the existing mortgage insurance plan even after moving to a new property. There comes another benefit with MRTA. Homeowners don’t have to pay higher premiums simply because your existing mortgage insurance is retained after moving.
Having an insurance mortgage can give you a peace of mind that you and your family will be covered in case of serious financial issues or unforeseen events like death. Having knowledge about insights of insurance mortgage can ensure that you have the right plan for maximum coverage.