Mortgage Insurance

About Mortgage Insurance

If you’re buying a home, you’ll know that it can be a fairly expensive outlay – not only do you have to take into account the actual monthly payments of the mortgage itself, but you have all the other extras, such as solicitor fees, survey costs, completion fees – the list goes on. Perhaps this is why so many people don’t bother with mortgage insurance, since they’re already paying out more than they bargained for.

However, the cost that you could be landed with if you don’t have mortgage insurance, and you fall into any kind of difficulty paying your mortgage, would be far greater than any extra monthly payment on your mortgage. And you could even get mortgage insurance cheaper still, depending on your circumstances.

What Are The Benefits

The most obvious benefit of having mortgage insurance is the insurance it offers you against any unexpected financial problems you may encounter in your life. This could be unemployment, sickness or accident, but at least by having mortgage insurance these potential problems are one less thing for you to worry about.

For example, say you’re in a car accident that leaves you with broken limbs. This kind of injury will normally keep most people out of work for a minimum of around 6-8 weeks, possibly more if the injuries are serious. Then you might have prolonged physiotherapy to deal with, which could add another couple of months onto your recovery time.

Now, taking this into account, you can soon see how you might struggle to meet your mortgage payments if you don’t have mortgage insurance. If you’re off work for five months, for instance, do you have enough savings to cover your mortgage, not to mention normal everyday costs like groceries and bills? Probably not, and this is where mortgage insurance comes into its own.

Less Then You Might Think

One of the reasons many people put off taking out mortgage insurance alongside their normal payments is the extra cost that it can involve. While it does involve some extra outlay, it’s not as much as you might think, and can even be as low as just an extra couple of pounds per month.

If you have had a high quote, it’s probably by some of the more unscrupulous insurers or advisors that are around. In fact, buying your mortgage insurance online can even save you up to 40% more than what a high street insurer or broker might be able to offer you.

Another reason many people put off taking out mortgage insurance is they simply don’t understand what the cover entails, so they feel that they don’t need it. This is especially true of the younger homebuyers, since they feel that they’re young and healthy, therefore they won’t get ill for a long time. However, illness and unemployment can strike at any time, so it’s more than just good sense to have mortgage insurance. And, if you are at all confused about what it entails, your advisor can explain in layman terms what mortgage insurance offers you.