Get Better Protection For Your Family
Let's Start with the Basics
Buying your home is likely the biggest financial transaction of life. It’s likely the biggest asset in your wealth, it’s certainly the biggest liability for most people.
Very few are lucky enough to be able to buy a home without taking out a mortgage, especially with the skyrocketing costs of homes in Canada.
The typical steps in the first time home buying experience revolve around you, the realtor and your bank.
Your mortgage broker or your lender can typically get you a “soft” approval based on your credit, income, current employment and existing debt loads.
Before realtors take their time to help you in your house hunt, they typically want to know; how high your budget is, some, won’t even consider working with you without a pre-approval letter.
While your lender works hard to get you the biggest loan possible, the realtor tries to find you the biggest home within the approval limit.
This could be a long process for most, requiring multiple appointments, home showings, tonnes of document follow-ups and filling up forms you’ve never seen before.
Add all that with the excitement of the furniture and decor planning, the last thing you’d want to do is talk about insurance and numbers, after all, those nights watching HGTV is about to pay off!
With this excitement, you’d likely just initial and sign on marked documents without even glossing over what you are signing up for. (That’s how majority client’s I’ve met have purchased their mortgage insurance, most of them think this is just part of the mortgage and fees.)
Before you go any further, MORTGAGE INSURANCE and MORTGAGE DEFAULT INSURANCE ARE NOT THE SAME.
Default insurance is a legal requirement for Canadian homebuyers who are putting down less than 20% down-payment on their home or have less than 20% equity in the home being financed.
This is in place in case the borrower (you) fail to repay the loan. Mortgage “life” Insurance is designed to pay off the loan if the borrower dies before the loan is settled.
On the surface, mortgage insurance may sound like a great Idea. But, BOTH OF THESE ARE DESIGNED TO PROTECT THE BANK.
With that, let’s break down the reasons why you should opt-out of your mortgage life insurance and get a personally owned term insurance instead.