Ce qu’il faut savoir sur l’assurance prêt hypothécaireAugust 29, 2016

What You Need to Know about Mortgage Insurance

For most people, buying a property is the most important financial decision of their life. That is why it is important to protect such an investment. While it can be very exciting to get a loan, do not accept just any condition and especially do not sign after looking at only the amount to be repaid weekly, biweekly, or monthly. Here's what to keep in mind when it comes time to talk about mortgage insurance.

Why Mortgage Insurance?

When the bank (or lender) grants you a mortgage, you both agree to certain repayment terms. However, it may happen that the borrower finds himself in a situation in which he is unable to meet his financial obligations (accident, disability, etc.). That is why most banks give a questionnaire to inform themselves of certain issues, such as your health, to ensure that the mortgage will be repaid in full, without a hitch.

Mortgage insurance makes it possible that the mortgage repay itself in case of the borrower's illness or death.

A Mortgage that Repays Itself?

Who wouldn't want a house whose mortgage repays itself?! Life would be much less complicated. Unfortunately, that's not how things work in the real world.

In case of illness or accident, your mortgage insurance does not immediately come into play. Only after a 90-day waiting period, in case of coverage, insurance will cover the mortgage payments. In the event of total disability (that is to say, if you find yourself in a state that excludes you from any form of paid employment that would allow you to continue your payments), coverage can extend up to 24 months. However, as of the 25th month, and for the duration of benefits, disability must be continuous, otherwise you will be responsible to continue the repayments.

Of course, the status of total disability requires that your doctor monitor your condition for the duration of your disability, in keeping with its severity.

Before Signing, Take the Time to Shop around for Your Loan

Few people will negotiate mortgage insurance. Most will simply be content to add the price of insurance to the total amount to repay and leave it at that. This is very bad habit, unfortunately, because it could cost you thousands of dollars after 20 or 25 years. To avoid unpleasant surprises, it is better to check with several banks before agreeing on a loan and everything surrounding it.

Check with your financial adviser on individual insurance contracts. They are usually cheaper, protect you against interest-rate increases, and allow you to turn your regular mortgage insurance into life insurance, regardless of your state of health.

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