Posted: 13 Jul '11
What is Mortgage Insurance
Mortgage insurance is offered by most banks and lending institutions. They’ll offer it to you when you get a mortgage or refinance your existing one.
It’s an insurance policy that pays the balance of your mortgage to the lending institution if you, the person listed on the mortgage, pass away.
Mortgage insurance provides a life insurance amount equal to your remaining debt. As your mortgage decreases, so does the payout you receive.
The cost of the insurance is based on the mortgage amount and your age at the onset of the mortgage, and the payments remain constant through the life of the policy.
Essentially, you’re paying the same monthly premiums for a reducing amount of coverage as you pay down your mortgage.
And mortgage insurance is great for the leader because it is listed as the beneficiary of your policy.
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