Mortgage insurance is one of the insurance policies that people shy away from. For most people, it is not as if they unaware of the benefits of mortgage insurance, but because of its financial implication on their finances as some are not willing to commit extra financial output. However, notwithstanding whatever the financial implication of buying a mortgage insurance could mean, it cannot however be compared to its benefits.
Mortgage insurance policy offers protection in the times of financial crisis for the policyholder. Also, it equally plays the role of assisting policyholders to secure conventional loans.
Opportunity to own a home of your own
This is one of the benefits of mortgage insurance. This policy gives a borrower a wide window to own a property. And with this, you can buy a dream home of yours. It is only mortgage insurance that will be able to grant you this opportunity.
Increases loan eligibility at a good interest rate in mortgage insurance.
Mortgage insurance provides a borrower will wide eligibility window and the lender with the flexibility to offer you the same comparative mortgage interest rates available to homebuyers even with a larger down payment option. And also, if one has to wait to save up to at least 20% down payment, there is a possibility that there will be an increase in the interest rate and consequently lead to an increase in the cost of the loan. Therefore, buying mortgage insurance will help you take advantage of low interest rate.
Provision of low down payment options as a benefit of mortgage insurance
The ability to save a down payment of 20% can pose a serious challenge for a person wanting to buy a home. For some persons, it can take an average of 10 years to save such amount of money. It is for this challenges that mortgage insurance steps in to provide smaller down payments, as small as 3% in some cases to clients thereby, making home ownership available to millions of persons and at the same time providing insurance coverage the lender in the event the borrower defaults in payment. Therefore, by the provision of this low down payment option, you are able to have access to plenty insurance products that will help you to achieve homeownership.
Similarly, mortgage insurance also provides flexible payment options by the provision of multiple payment ways for borrowers. This further makes homeownership easy and accessible to them.
Additionally, there is also an avenue for cancellability wherein a borrower can cancel the insurance policy on reaching 20% equity in their payments for homes. This is done by paying the complete principal mortgage sum etc.
Opportunity to buy and not rent
For those who are paying rent and wants to buy a property with flexibility, mortgage insurance provides you with an opportunity to buy one with flexible payment options an you continue to be the legal owner of the property. It is undoubtedly the best move to consider when contemplating buying a home.
Opportunity to get a financier in mortgage insurance
Mortgage insurance policy offers an opportunity for home buyers who ordinarily would not have accessed to mortgage financing to access one by benefitting from mortgage insurance. The presence of this insurance coverage gives the lender a peace of mind knowing full well that in the event the borrower is unable to pay up the loan, then there will be a fall back by getting the insurance company to step in and provide indemnity. For instance, people who are self-employed or rely on commission who might not be eligible for conventional loan will be able tom access home financing they need through mortgage insurance.
Opportunity to acquire vacation property
Mortgage insurance provides various insurance products that will enable you to acquire a vacation property. This is provided that you have a good financial standing. Therefore, if you are thinking of buying a vacation property, this insurance policy will provide you with the opportunity.
Opportunity to get a refund
MI policy provides an opportunity to the borrower to get about 10% refund on the insurance premium if he has bought an energy efficient home or even a refinance of an already existing home to make energy-saving reconstructions or renovations.
Saves for household purchases
It is not always easy to combine buying a home together with buying household wares at same time. Expenses will always add up but with insurance, you will have the benefit of savings on appliances supplies, rentals, aesthetic/ house improvement materials etc.
Transferability
Some MI policy terms contain transferability clauses. What this means is that you will be able to transfer the terms in the present policy to future property. The benefit of this is that it will save you premiums when you transfer.
Indemnity in the event of accidents
MI provides indemnity in the event of eventualities, be it job loss, illness, etc. as we all know, most financial mishaps happen when they are least expected. Therefore, with mortgage insurance, we will be sure of help you need to keep you in your home in the event of these sorts of incidents.
Opportunity to pay back loan even on death as one of the benefits of mortgage insurance
This class of insurance policy enables the borrower to pay back all or a part of the loan in the event of death. In other words, the policy will cover the amount of indebtedness to the lender and this will ensure that the survivors of the borrower will be able to pay up the loan amount and continue to enjoy the ownership of the property
