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How Do I Get Cheap Mortgage Insurance?

Article Details
  • Written By: N. Madison
  • Edited By: Jenn Walker
  • Last Modified Date: 22 April 2019
  • Copyright Protected:
    2003-2019
    Conjecture Corporation
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When you are hoping to buy cheap mortgage insurance, it is usually important to consider the lender. In most cases, your lender will choose a provider; more rarely, the lender might offer a small selection of providers from which you can choose. As such, you may have to pick the lender that works with the most affordable insurers to get cheap mortgage insurance. You will have a choice, however, if you want to buy additional mortgage protection insurance that helps you make your payments if you are unemployed or disabled. In such a case, you may do well to compare providers based on the extent of their coverage, their reputations, and the cost of premium rates.

Most borrowers don’t have much choice when it comes to purchasing mortgage insurance. Usually, the lender chooses the provider and the borrower must pay the premium. This is due to the fact that mortgage insurance is intended to benefit the lender, which takes on a risk when providing a mortgage to a borrower. This type of insurance protects the lender in case of default. As such, you may have the best chance to secure cheap mortgage insurance by selecting a lender that uses a low-cost provider or choosing a lender that allows you to select from different insurers.

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You might also secure cheap mortgage insurance by choosing the most affordable premium payment option. Often, securing cheap mortgage insurance means selecting a single-premium plan, which means you will pay for the insurance in one payment rather than monthly. Often, this translates into paying less money overall than if you choose to make monthly premium payments. This does mean the insurance is paid for in a lump sum at the beginning of your mortgage period, but you will likely have the option of financing it instead of making an additional payment.

When you choose to obtain cheap mortgage insurance by paying a single premium and financing it, you can benefit in a couple of different ways. First, you will likely pay less over the life of your mortgage than you would if you paid a monthly premium over the loan term. Second, you might enjoy an additional tax deduction based on the interest paid on the financing of your mortgage insurance.

You can also choose to purchase an additional mortgage insurance policy that affords you some protection in the event of hardship, and in such a case, you would have the opportunity to select a provider. For example, you could buy insurance that will cover your mortgage payments if you lose your job or develop a disability. In such a case, you may do well to select a provider who is reputable, offers a policy that covers multiple types of hardship, and offers low premiums. It is usually best to avoid selecting based on cheap premiums alone, however, as this doesn't always translate into the most reliable or comprehensive insurance.

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