The following is a guest post from Houston, Texas real estate developer and entrepreneur Tracy Suttles.
Mortgage insurance or MPPI normally pays out after a period of 30 to 60 days, thus ensuring that mortgage payments can be made. Mortgage income protection insurance helps prevent debt problems and can stop repossession.
Trawl the Market for the Best Mortgage Insurance Quote
Most people buy their mortgage insurance directly from their bank. The purchase is normally made at the time of getting the remortgage. Money Week Editor-in-chief Merryn Somerset Webb stated that “The High Street banks charge up to five times as much in premiums as the few independent providers.”
Using an online mortgage payment protection insurance price checker ensures that the market is trawled for the best price. Alternatively, consult an independent financial advisor (IFA) as they can fulfil the same function, as well as advising on the small print of any policy.
Use MPPI to Cover More than Simply the Mortgage Payments
Whilst paying the mortgage is the main priority, help will still be needed with other bills. It is still necessary to pay for council tax, food etc. Most mortgage lenders will only quote sufficient insurance to cover what is owed to them. Don’t fall into this trap.
Don’t Waste Money on Mortgage Insurance when in Casual Employment
Taking out mortgage payment protection insurance may provide peace of mind when doing seasonal work, but it won’t provide any mortgage cover. The T&Cs of the MPPI policy will seek to exclude cover. It’s pointless taking out mortgage cover in this instance so don’t waste money doing so.
Cheap Mortgage Insurance Isn’t Always the Best
Whilst it is always advisable to trawl the market for the best priced mortgage insurance, don’t be fooled into thinking that cheapest is always the best. Read through the T&Cs to make sure that cover is provided where it is needed.
Time Needed to Elapse before a Mortgage Payment Protection Insurance Claim
All policies tend to pay out within 60 days, but there are many superior policies that will provide help with mortgage payments after 30 days. If the price of mortgage insurance is cheaper, it is quite probable that the deferred period before receiving help with mortgage payments is greater.
Mortgage insurance is the right move as it helps with mortgage payments during times of personal adversity. Always read through the T&C’s before signing up. If debt problems and mortgage arrears present a problem, consult a qualified debt counsellor to identify an appropriate debt solution.
Always remember that mortgage insurance is only one of a number of potential protection policies. Those with young families or mortgages should also consider a life insurance policy, critical illness cover and payment protection insurance.