Mortgage protection insurance is an insurance policy designed to protect you against unexpected events that could result in your inability to meet your mortgage obligations. The policy will pay off the outstanding balance or make the monthly mortgage payments on your behalf, depending on the type of coverage you have.
There are several benefits of having mortgage protection insurance.
Peace of Mind
Mortgage protection insurance provides a safety net in case of an unexpected event. This is particularly important for individuals with other significant financial obligations who may not have the necessary savings to cover a prolonged period of unemployment or illness.
Credit Rating Protected
Mortgage protection insurance can help to protect your credit rating. A missed mortgage payment can significantly impact your credit score. This can affect your ability to obtain credit in the future. Your policy will make mortgage payments on your behalf, helping you to avoid any negative impact on your credit score.
Equity Protected
If you can’t make repayments or default on your loan, you risk losing your home through foreclosure. Your mortgage protection policy can help protect your property’s equity by paying off the outstanding balance if, because of unemployment, serious illness, disability or death, you can’t
The policy cost will depend on various factors, such as your age and health status, the size of your mortgage, and the type of cover you choose. However, compared to other forms of insurance, such as life or disability insurance, mortgage protection insurance can be a more affordable option for many homeowners.
Mortgage protection insurance provides valuable protection and financial security in the face of the unexpected. It is a valuable addition to your financial plan as a homeowner.