How Good a Deal Is Your Banks Mortgage Insurance Plan?

Home
>
Mortgage Refinance
>
How Good a Deal Is Your Banks Mortgage Insurance Plan?

How Good a Deal Is Your Banks Mortgage Insurance Plan?

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.

Ivon T. Hughes, The Hughes Trustco Group Ltd. Canadian Insurance Broker - Get a FREE Quote TODAY! Tel: (514)842-9001 Email: info@trustco.ca Web: http://www.trustco.ca

In The News:

King of How To News
No Drop in Refinancing Expected
NASDAQ
Overall mortgage lending is expected to increase slightly this year, the Mortgage Bankers Association (MBA) is predicting, thanks to declining rates that are supporting continued demand for refinancing. The MBA today upped its mortgage lending estimate ...
Mortgage Refinance in Today's Real Estate MarketKing of How To News
Refinance Applications Increase in U.S. for Third Consecutive Week, Driven by ...World Property Channel
Today's Mortgage Rates: Bank of America, Wells Fargo and PNC Bank Refinance ...Eastern Morning Herald
The Republic -Community Voice -MortgageLoan.com
all 59 news articles »

eCreditDaily.com
Time to Refinance While Mortgage Rates are So Low
FreeRateUpdate.com
After taking a look at these details, many borrowers are going to find that it is time to refinance while mortgage rates are so low even if they refinanced several years ago. For those with adjustable mortgage rates, it is the perfect time to switch to ...
Mortgage applications up on refi demand: MBAReuters
MBA Weekly Survey: Refinance Applications Increase Because of Record Low ...LoanSafe
The Truth About Mortgage Refinancing Revealed by Kansas and Missouri Mortgage ...SBWire (press release)
The Hill (blog) -eCreditDaily.com -MarketWatch (press release)
all 106 news articles »

e-wisdom.com
Realtors(R) Offer Support for Bill to Help Responsible Homeowners Refinance
MarketWatch (press release)
WASHINGTON, DC, May 24, 2012 (MARKETWIRE via COMTEX) -- A proposed bill to streamline and align the refinance processes of Fannie Mae and Freddie Mac may soon make it easier for homeowners who are current on their mortgage payments but who have been ...
Mortgage Rates: Low Mortgage Rates Remain in Place as Consumer Sentiment SoarsFreeRateUpdate.com
Freddie Mac: 30-year mortgage rate down a tick at 3.78%Los Angeles Times
Refinancing homeowners overwhelmingly choose fixed loanse-wisdom.com
International Business Times -KETK -BusinessWeek
all 315 news articles »

The Mortgage Reports (blog)
The Truth About Mortgage Refinancing Revealed by Georgia Mortgage Expert
SBWire (press release)
Atlanta, Georgia based Mortgage Broker Brad Hartman reveals mortgage refinancing secrets, offers free reports, a home buying guide and free mortgage calculators on his website, brad-hartman.com. The site is designed to give Georgia residents all the ...
Real estate industry pushes Senate on refi billMarketWatch
Push intensifies to pass home-loan refinancing billThe Hill (blog)
Q & A : Why Won't My Bank Do HARP Mortgages With PMI Or LPMI?The Mortgage Reports (blog)
FreeRateUpdate.com -Cleveland Jewish News -Seeking Alpha
all 13 news articles »

Mortgage rules prove too strict for some retirees
Washington Post
Jim Eberle of McLean found this out the hard way when he applied to refinance his mortgage. After spending much of his career working for banking industry trade associations in Washington, Eberle, 68, decided to take advantage of this spring's ...

and more »

Mortgage Origination Forecast Increased by Nearly $200 Billion by TSA
LoanSafe
MBA now expects that mortgage originations will reach $1.28 trillion in 2012, up from $1.26 trillion in 2011. Refinance originations are now expected to total $870 billion in 2012, an almost identical amount to 2011. MBA is slightly lowering its ...
2012 Originations Now Expected to Exceed 2011Mortgage Daily

all 2 news articles »

Obama's Disclosure Shows Mortgage Refinance Not High on Agenda
San Francisco Chronicle
Rates for a 30-year fixed mortgage averaged 4.46 percent last year, according to Bankrate.com data, hitting a low at the end of the year of 3.92 percent. In 2011, 4.3 million homeowners refinanced, according to data from the US Department of Housing ...

and more »

Politico
Obama to tout success of mortgage refinancing
Washington Post
In addition, he cited a program Obama announced in October 2011 designed to remove barriers to refinancing to homeowners with federally backed mortgages. Now, it is up to Congress, Donovan said, to expand such programs to homeowners with loans that are ...
Obama touts mortgage refinancing to help economic recoveryThe Hill (blog)
Obama Visits Reno, Urges Congress To Expand Mortgage Refinancing ProgramCarson Now
In Nevada, Obama touts his housing crisis effortsLos Angeles Times
Politico -CNN (blog)
all 599 news articles »

Chicago Tribune
Costco members can now shop for mortgages online
Chicago Tribune
Mortgages? Well, not exactly. The company is receiving a fair amount of publicity for the rollout on its website of a home purchase and refinancing mortgage product for members. But technically it's not Costco's program. It's an online mortgage ...

e-wisdom.com
Mortgage refinancing applications jump; rates fall: MBA
Chicago Tribune
NEW YORK (Reuters) - Applications for US home mortgages surged last week, driven by increased demand for refinancing as interest rates hit fresh lows, an industry group said on Wednesday. The Mortgage Bankers Association said its seasonally adjusted ...
Mortgage refinancing surgesBizjournals.com
The Truth About Mortgage Refinancing Revealed by Pennsylvania Mortgage ExpertSBWire (press release)
Mortgage applications increase on jump in refinancingThe Hill (blog)
LoanSafe -LoanRateUpdate (press release)
all 120 news articles »

Google News