How Good a Deal Is Your Banks Mortgage Insurance Plan?

Navigation: Main page » Mortgage Refinance

 Print this page Submit articleComment article

Author: Ivon T. Hughes

Article source: http://www.loans-n-debts.com/. Used with author's permission.

When you go to the bank to get a mortgage, you'll inevitably be asked to take out mortgage insurance. The idea behind mortgage insurance is simply that if something happens to you or your spouse then your loan will be paid off which is good news for your family and the bank. Most financial institutions act like they are doing you a favor by offering you mortgage insurance through their own group plan, but are they?

The truth is that you could probably get a much better deal and at least an equal amount of protection by shopping around for your own insurance policy.

Essentially, mortgage insurance is no different than term-life insurance. With both, your policy only lasts for a specified period of time and pays its benefits if something happens to you or your spouse. The real difference comes down to how much control you'll have over your policy and how much you'll pay for it.

If you choose to use the mortgage insurance offered by the bank, you will not be able to customize a policy to fit your needs and you'll be lumped together with other borrowers under a group plan. Because of this, you will only have limited control over your policy. For example, through a third party provider, you would be able to choose your own beneficiary, decide how to spend the proceeds if necessary, and cancel the policy at any time. You would not have these options with a lending institution.

Additionally, the bank maintains the right to not renew your policy and to cancel the policy when you sell the house. If you find your own insurance provider, you can make those decisions yourself.

The other big difference is cost. A third party insurance policy's premiums will not go up, so you would pay the same premium today that you'd pay ten years from now. You won't get that same guarantee from a bank which can and probably will increase your premiums during the life of the policy. In most cases, you'll probably pay more through a bank anyway. In fact, you could pay as much as 40% more than you would if you shopped around and found your own insurance provider. Not to mention that the policy you take out through your bank will gradually decrease in value while a plan you select from an outside source will be worth the same amount during the entire policy period.

Of course, many people don't mind paying more for their mortgage insurance because it's more convenient than dealing with insurance agents. The truth is that you can easily find a policy that fits your needs and provides affordable premiums via the Internet. An organization, such as the Hughes Trustco Group, can even generate quotes for you from multiple insurance providers so you'll know that you're receiving the best deal possible on the policy you want.

The bottom line is that mortgage insurance is important and should be part of your home buying or refinancing preparations, but that does not mean you need to pay more or let the bank make important decisions for you. Instead, you should find your own personal plan from a third party provider which will let you stay in control of your policy and will save you money in the long run.

Nine Vital Lessons For Avoiding Training Fads That Waste Time, Money and Enthusiasm
There are so many fads aroiund training and development and so much pseudo-science. This is hurting people and organisations. People get annoyed and dispirited ...

Who Should Trade a Mini Forex Trading Account?
Why traders should take a forex mini account, explained by Toby Smitz.

A Secured Loan Could Save You Money
The interest rate will be lower on a secured loan than on a comparable unsecured loan. A secured loan may also offer more flexible repayment periods.

Managerial Survival Key
For business, non-profit or association managers like yourself, survival pretty much depends on whether you achieve, or fail to achieve your department, divisio...

Dieters : Questions You Must Ask Yourself when You Want to Lose Weight
The 5 key questions to ask yourself to ensure your weight loss success.

Are You A Victim Of A Predatory Mortgage Foreclosure?
Help is available to borrowers who have claims against their lenders for violating the Truth in Lending Act and other laws regulating credit transactions. Such ...

The Centre of Creative Powers!
Universe responds to the language of feeling and its associated energy. Start living with energy rather than thoughts or mind. It opens up much bigger dimensio...

How To Use Banner Ads Effectively
It's no big secret that banner ads have become less effective than text links over the years. This phenomenon is called "banner blindness". Banners were so ubiq...

Child Yoga – What is All the Fun About?
A child yoga class can help your child grow stronger physically, mentally, and emotionally. Find out how your child can benefit from yoga and have a lot of fun...

Top Hat – The History & Origin
Short of a crown worn by royalty, the top hat is without a doubt one of the grandest of all forms of headwear. Lord Ribblesdale set the precedent for the fellow...

How Will I Decide What I Should Sell?
Its a classic question. What came first the chicken or the egg? Should I choose a product that will possibly produce the most income, or should I choose somet...

Elliptical Trainer Sleepy Foot Syndrome
Have you ever been striding away on your elliptical trainer, getting into a great workout, and then realize that one of your feet has gone numb all of a sudden?...

3 Ways To Maximize On The Effectiveness Of A Golf Instruction Video
Golf instruction videos featuring techniques and tips from leading world class players are very common these days.

Cultural Awareness - an HR Perspective
The use of cultural awareness training has increased rapidly in the majority of global companies over the last decade. My experience working in global companie...

Oh My Aching Head! Can Music Really Make You Feel Better?
We all know, if only instinctively, that music has a profound effect on us. If we didn't believe that music affects us then singing lullabies to calm children ...

What is the Best Stock to Invest In?
If you're like most stock market investors you have struggled with finding the best stocks to invest in.

The Business Autopsy: A Fact Of Life
Last week we discussed the importance of performing an autopsy on a dead business. No, I haven't been watching too many of those wonderfully graphic, TV forensi...

Gnosis: The Secret of Solomons Temple Revealed
Life is a journey we all have to take. We are born with no knowledge whatsoever other than some minor genetic memories, and many of us simply follow the pattern...

Christian Unity according to Internet
This pamphlet includes questions for reflection, but is basically being written to show the attitudes people have in reconciling the differences that exist betw...

Publicity - How to Write a Headline That Will Garner Free Publicity
Need to write a headline for your press release? Here's what you need to know.

Networking, iNetworking, What Is The First Rule?
Is networking the same in person as over the Internet? Do you make some networking mistakes via email that don't get answered or you are baffled by the respons...

Manifest Your Desires Using Natural Hypnosis
Using positive affirmations is a highly effective to reprogram ourselves. Using positive affirmations in a concentrated form is even more powerful and brings f...

Your Wedding Budget: Setting It And Sticking To It
A wedding budget can cause emotional strain on a couple and their relationship. It is important for them to discuss their finances and establish a clear budget ...

The Counsel of Caution
If you're a woman who has ever loved too much, you may be surprised to learn a simple approach that can prevent you making the same mistake again.