mortgage protection insurance (again)

behaviorkelton

17 years ago

I've seen people talking about this issue, but I can't find any reference to how much this stuff costs.

So how much would it cost to, say, insure a $100,000 mortgage.

I'm talking about the type of insurance that will pay your mortgage payment if you should lose the ability to work.

Comments (9)

Chemocurl zn5b/6a Indiana
17 years ago
I would think that there would be a lot of factors considered in determining the cost of insurance...age for one.

Is there only one name on the mortgage?

I wonder how that would work if there were 2 names (and most probably 2 incomes), on the mortgage.

I think it is a considerable amount of the payment, and I never had it, but instead was comfortable with having savings, in the event of a major illness or injury.

Sue
western_pa_luann
17 years ago
We just took out a regular insurance policy in my husband's name (I am a SAHM) for the balance of the mortgage (after our down payment). WAY cheaper....
Related Discussions
Mortgage Company holding insurance claim
Q
Comments (4)
The mortgage company definitely has an interest in ANYTHING put into that house - even after purchase. If you were to default, they'd get the whole house, not just the house minus your improvements. Seriously, your damages do affect the value of the current house. If you were to take the money and not repair, that overflow damage issue would affect the value of the home - if left undone. If, however, you had a claim for a damaged deck, or pool that was not part of the original purchase, the bank would happily sign off on the check if you chose to not replace those items. (You would have to properly dispose of them and make certain the evidence of the removal looks reasonable.) If you choose not to re-do the basement, the bank will require the toilet overflow damages to be repaired and have the basement cleaned up to the standards it was at time of purchase. My bank once had someone with the same issue -- homeowner fully finished basement after buying the house. Then the basement flooded. Homeowner did not want to do anything with the basement other than dry it out and then cash the check. He had flaking sheetrock, warped panelling, glue streaks all over the floor from the carpeting, and water stained and damaged woodwork. The residual damages would have lessend the value of the home, but if he ripped evererything back to the concrete walls and floor, no problem.
...See More
Mortgage Protection Plans
Q
Comments (6)
If your mortgage owing at present is, say, $100,000. you owe that amount right now. In a couple of years, as your mortgage payments are for equal amounts over a period of years, you'll owe almost as much, for most of your payment is being used to cover the interest cost. After about ten years, the amount left owing on your mortgage is somewhat less, so less interest is needed to cover that amount, and a much larger portion of your regular payment goes toward paying off principal. Which is a good reason to make additional payments as permitted, especially in the early years of the mortgage, for the whole amount of the extra payment goes toward paying down principal and may be almost as much as the total amount of the principal that had been paid off by your mortgage payments through that whole year. During the later years of your mortgage, as the principal is smaller, much, eventually most of your regular payment goes toward paying down the principal. At that time, the remaining principal is rather small, and that is the total amount of insurance that the insurance company will pay if your spouse dies. But the amount of annual premium almost always remains constant. Many advisors say that it's best to skip the mortgage insurance, on which premiums are often rather high, and just go for regular insurance. That way, as the remaining amount owing on the principal decreases, the amount of insurance carried remains the same, so there'll be some extra left for you to use for other purposes. In many cases, I think that you'll find that buying a larger amount of term insurance (which mortgage insurance is) may not be more costly than purchasing mortgage insurance. As a matter of fact, most families when they are young need quite a bit of insurance, to provide for not only paying off the balance owing on the house mortgage, but to provide for the ongoing living needs of the bereaved over a number of years, possibly including part of the cost of university, etc. (at higher rates than currently, allowing for inflation). As the years go by, there are fewer years to care for the chidren until they are educated and independent and fewer years to care for the surviving parent, so decreasing face value of term insurance is often a wise choice - but for a much larger original amount than solely to cover house mortgage retirement. Good wishes as you make your decision. ole joyful
...See More
Frustrated with Mortgage Co after Loss
Q
Comments (14)
jrldh - Actually it is on the bottom of page 12 :-) LOL. I read and re-read that paragraph eleventeen times last night looking for loopholes. I'm sure I read this when we got our mortgage and thought to myself, "Nothing like that will ever happen to us." ha ha ha. (I was 23 when we bought this house... cut me a break! ;-) neesie - the insurance used to only work with you, their insured. After Hurricane Charlie in 1992, many people with totaled homes took the insurance money and didn't repair their home, leaving the mortgage co's with no equity in the pile of rubble, and all the insurance money was with the insured in Mexico on the beach :-) So a federal law was passed protecting the mortgage companies interests. I get that. My problem with MY situation is that due to the LTV, their interests are not compromised with 25K of damage, and they have no rights to my money. Sigh. Mariend, I think that I still get to pick the people, they just want 8 forms (I am not exaggerating) filled out by anyone who works on our house and detailed receipts of expenses. I'm basically just too lazy to manage it all given all of our other life's business. Thanks for the tea! This increases my resolve to keep paying 50% extra to principle every month so as not to be beholden to the man. Or slightly less beholden, anyway.
...See More
What is a "Mortgage Freedom Account"
Q
Comments (13)
"The simple, unwashed advice is to rebalance your equity OUT of your real estate... probably to at least 70-80% of the total value, and move the funds to safety reserves growing in a principal-protected/insured manner." Sounds good, until market tanked, and you had already "rebalanced" your equity OUT of your real estate at market high. Now you have to move, but the current real estate value is only a portion of the value during market high, even with the balance in "your mortgage freedom account" you could not repay the mortgage that you had refinanced. What would you do? I remember the one person who provided the advice was banned from Gardenweb. I wonder how many people took his advice and later lost their homes. At your age, the smartest thing to do with your money is to increase your earning potential by getting more education, training and experience at your chosen career.
...See More
steve_o
17 years ago
A properly-valued life insurance policy will function in part as your mortgage-replacement insurance, your credit-card insurance, your installment-debt insurance, etc.

However, most life insurance policies do not cover disability, which is a far more likely occurrence over your career than death. If you cannot work at your job, what could you do which would earn you enough money to continue to pay your bills? Some workplaces offer disability insurance, either paid for by the company (rarer and rarer) or as a group policy for its employees. The thing to watch for there is "own occupation" -- cheaper disability-insurance policies will only pay you for your disability if you are unable to perform any job (even filling boxes on an assembly line or stuffing erasers on pencils) -- regardless of whether the income that new job provides remotely resembles your old income. In that case, you probably qualify for SSDI anyway. So, if you go for disability insurance, make sure it covers your income for the kinds of jobs you have been educated to do.
Karen_sl
17 years ago
And, here is something you all should consider....getting this insurance from your insurance agent not the lender.
When you get the insurance from the lender they always get the money.
If you get insurance from an agent you are the beneficiary.
An example..
Mortgage life thru the bank..
Mr. bread winner dies, mortgage paid off. No extra money for spouse.
Mortgage life with insurance agent...
Mr. bread winner dies, spouse gets the money...she may continiue to pay payments and if necessary have $$ for repairs.
I sold insurance for years and saw a person in great trouble because had life insurance with mortgage company. When her spouse died, the house was paid for...wonderful. She needed a furnace and a roof but had no $$ for that. With the life with her insurance co, she could have made these payments and her repairs while she got on her feet enough to get a job and continue.
And, do you all know that most times the insurance is cheaper thru an agent as opposed to the bank??
Ok, sorry, that was my 2 cents!!
Karen L
devorah
17 years ago
Karen nailed it. If you aren't required to buy mortgage insurance, don't do it. Get term life insurance instead.
behaviorkelton
Original Author
17 years ago
OK... so what can a 41 yr old healthy guy expect to pay for term life insurance.
Or is there somewhere I can get a free quote without having to interact with a "come on" sort of marketing?
steve_o
17 years ago
You probably can find some prices for companies which do business over the Internet, though you'll likely have to supply them with an email address (make it a disposable one). Or you can call an independent broker in your community; at least he/she is not representing just one line. Or just get really good at saying, "No, thank you."
kudzu9
17 years ago
grace101-
I see you just joined these forums. If you didn't read the policies before you joined, you need to know that these forums prohibit commercial solicitations, such as you've just made, and that your membership can be cancelled for violating that policy.
joyfulguy
17 years ago
If the lender furnishes the insurance, the benefit goes to them: if the homeowner buys it, he (well, his survivors - he'll not have much need of it, where he goes) gets the benefit, as mentioned above.

A problem with mortgage insurance, though, is that the amount of insurance is the amount of the principal still owing - that decreases over the years, more rapidly near the end.

However, if you buy your own term insurance, usually you'll get a larger amount for the same premium, but the amount of benefit will stay constant throughout the full term.

If you arrange to delay death for a period, there'll be some extra benefit over the amount needed to pay off the mortgage that the survivor can use for other purposes.

It is worthy of consideration that most of us are about 4 times as likely to suffer disability as death during our working years.

ole joyful

mortgage protection insurance (again)

Comments (9)

Chemocurl zn5b/6a Indiana

western_pa_luann

Related Discussions

steve_o

Karen_sl

devorah

behaviorkelton
Original Author

steve_o

kudzu9

joyfulguy

COMPANY

BUSINESS SERVICES

GET HELP

CONNECT WITH US

mortgage protection insurance (again)

Comments (9)

Related Discussions

behaviorkeltonOriginal Author

COMPANY

BUSINESS SERVICES

GET HELP

CONNECT WITH US

behaviorkelton
Original Author