Mortgage and Refinancing Information Channel:
We would like to thank the local libraries, schools, and universities for recommending students to visit us when doing research on any of our information topics.
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.
MORE RESOURCES updated Thu. September / 28 / 2023
CFPB Mortgage Report Finds Jumps in Closing Costs and Denials ... - Consumer Financial Protection Bureau
CFPB Mortgage Report Finds Jumps in Closing Costs and Denials ... Consumer Financial Protection Bureau
Buy Now, Refi Later? 84% of Recent Homebuyers Are Banking on It U.S News & World Report Money
Can You Roll Closing Costs Into Your Mortgage? GOBankingRates
How to Get a Pool Loan Investopedia
Why Now Is a Horrible Time to Refinance Student Loans The Wall Street Journal
What's the cost of refinancing a mortgage? Mortgage Professional
VA loan refinance: What is it and how does it work? Yahoo Finance
Can I Refinance a Car Loan With a Cosigner? Car and Driver
What does government shutdown affect in NJ? NorthJersey.com
MBA: Mortgage Applications Decreased in Weekly Survey Calculated Risk
The Great Pandemic Mortgage Refinance Boom - Liberty Street ... Liberty Street Economics -
Refinancing your mortgage could save you thousands — here are some of the best refinance lenders - CNBC
Refinancing your mortgage could save you thousands — here are some of the best refinance lenders CNBC
Today's 30-Year Mortgage Refinance Rates U.S News & World Report Money
11 Home Refinance Loans For Bad Credit (Sep. 2023) BadCredit.org
Should You Refinance Your Home Loan? Credible
Current mortgage refinance rates in 2023 USA TODAY
Compare Today’s Refinance Rates U.S News & World Report Money
Should I Refinance My Mortgage? - Buy Side from WSJ The Wall Street Journal
Here’s how sharply mortgage refinancing has dropped off Yahoo Finance
15-Year Mortgage Refinance Rates: Compare Current Rates Business Insider
Mortgage Refinance Rates SFGATE
Loan officer: I’m seeing middle class homebuyers take on $7,000 mortgage payments thinking they can ‘always refinance when rates come down in the future’ - Fortune
Loan officer: I’m seeing middle class homebuyers take on $7,000 mortgage payments thinking they can ‘always refinance when rates come down in the future’ Fortune
30-Year Refinance Rates: Compare Current Mortgage Rates Business Insider
Mortgage Rate Forecast: When Will Rates Go Down? U.S News & World Report Money
Mortgage and refinance rates today, Jul. 3, 2023 The Mortgage Reports
Should you refinance your mortgage to pay off debt? New York Post
Why Older People Can’t Get New Mortgages The New York Times
What Credit Score Is Needed To Refinance a House | Chase Chase News & Stories
What Happens After You Refinance a Car Loan? Investopedia
Should I refinance my student loans? MarketWatch
We Refinanced Our House a Year After Buying It for Long-Term ... Business Insider
The Age Gap in Mortgage Access Federal Reserve Bank of Philadelphia
How to Refinance Student Loans in 5 Easy Steps LendingTree
How to Refinance a Car Loan in 2023 Investopedia
How to Tap the Value of Your Home—Safely Consumer Reports
These 4 mortgage lenders can be excellent choices for seniors — whether you're refinancing or getting a new home loan - CNBC
These 4 mortgage lenders can be excellent choices for seniors — whether you're refinancing or getting a new home loan CNBC
Home-Mortgage Lending Across U.S. Falls To More Than 20-Year ... ATTOM Data Solutions
Mortgage and refinance rates today, Jul. 13, 2023 The Mortgage Reports