You’ve found your dream house, put in an offer and – ACCEPTED!
Now comes the excitement (and exhaustion) of getting everything in order to actually move in! You’ve got to get a Lawyer to handle the paperwork; meet with your broker or bank and sign the mortgage documents, head down to Broadway and do some sidewalk shows to help fund your down payment, make sure your home and fire insurance is in order, get your utilities all set up – AND – You still don’t have any STUFF to put in the house!
Simply put, buying a house can be stressful enough as it is, and because there are so many moving parts to buying a new home, it’s easy to sign pretty much everything that is put in front of you without taking a second look…
During the mortgage application, your banker or broker might have put a document in front of you called “mortgage life insurance” or “creditor insurance” and explained why it’s a good thing to have. After all, if you die with a half a million dollar mortgage outstanding, it might make sense to have that paid off – right? Well, sort of. It makes perfect sense to protect the most important single asset you will ever own, but NOT with bank creditor insurance.
The 2 biggest reasons?
- It’s EXPENSIVE
- The Bank is the beneficiary of the insurance money!
So, let me get this straight? I pay an overpriced monthly premium to my bank on top of my mortgage payment so if I die my mortgage is paid off and the bank gets to keep the money? You can probably tell right now why banks like to sell you this stuff……
Let’s look at the numbers. A couple both age 32 with a $500,000 mortgage could be paying between $100.00 and $120.00 a month EXTRA on their mortgage for their mortgage life insurance (depending on their lender, sample rates as of July 2015)
We’ve already discussed that protecting your mortgage IS a vital part of owning a home, so let’s look at some other options, shall we?
Take that same $500,000 mortgage and that the same couple talked to their friendly neighborhood licensed life insurance broker. They can lock in a rate of as low as $28.80 per month (sample brokered rate using lifeguide as of July 2015), and guarantee that rate won’t change for at a MINIMUM ten years. They can also name whomever they want as a beneficiary of the money, certainly not the bank!
The math says this could be a potential savings of $1104.00 PER YEAR, by doing nothing other than talking to your insurance broker. I don’t know about you, but that buys a LOT of cat food. Grumpy cat is HAPPY!
Remember – You can cancel your existing mortgage insurance at ANY TIME through ANY LENDER, you are not bound to a policy forever. If you have a mortgage with a life insurance policy attached to it, why not give your local TRUSTED SASKATOON Insurance experts a call, and let us save you some dough. You still need furniture, remember??
Curtis Haigh
Precision Financial – 306-230-4897
