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Why you should not buy mortgage insurance
at your bank! |
REASON #1
While the monthly premium is generally
locked in at the rate per $1000 according to the age of
the older insured person, the amount of the payout shrinks
as the mortgage is paid down.
What does this mean for you?
The cost of mortgage insurance becomes
very expensive as every week passes!
The graph in figure 1.1 shows a
$100,000 mortgage with an amortization period of 25 years, at an
interest rate of 6.7%. The balance owing declines as illustrated.
Fig.1.1 Declining
Balance versus Level Coverage
To illustrate the problem, let's say
you pay $50 per month for bank mortgage insurance at year one. After 15
years, you continue to pay $50 per month, but for only about $60,000 of
protection. After 20 years, you continue to pay $50 per month, but for
only about $40,000 of protection. The price per $1000 of insurance
keeps going up!
With our low-cost solution, upon death
your beneficiary receives the full $100,000.
And yet the premiums remain very competitive to the bank's! If you are
over 30 years of age and a non-smoker, your premiums just can't be
beat by the banks!
REASON #2
When you die, the bank receives the
proceeds. You cannot assign anyone else, including family members,
as beneficiary.
In contrast, with our solution, you
appoint a beneficiary who can use the proceeds in whatever manner
he/she wishes. If it is wiser to invest the proceeds rather that pay
off a low interest mortgage, the beneficiary has the choice.
If your family does decide
to pay off the mortgage, they can keep the balance of the proceeds.
In the example above, if you died 15 years later, your family would keep
about $40,000 and also have the home completely paid off! You get
unparalleled value!
REASON #3
Any change to a mortgage document --
refinancing or a change of address, for instance -- opens the door to
collapsing the mortgage insurance agreement with the bank.
You are then required to reapply for
insurance, and rates increase with age upon renewal. If your health is
poor at that time, the application may be turned-down, leaving you with
no protection.
With our solution, your protection is
guaranteed for the full length of the term, regardless of any
change in your health, and is completely independent from any changes
made to your mortgage, including refinancing or transferring the loan to
any other lender.
Important notice:
Our mortgage insurance plan does not replace CMHC mortgage insurance,
which is insurance you buy when you can't put at least 25% deposit down
to buy your home.
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