Importance of insurance for mortgage.
Legislatively mandatory insurance life and health of the borrower applying for a mortgage, canceled about a year ago. When drafting the bill MPs would adhere to that pledge of an apartment and so is sufficient collateral for the loan, so the life insurance and health of its owner - an unnecessary precaution. But most banks have been slow to waive insurance coverage not only flat, but its owner. And if you exclude this item from the list of mandatory conditions required for the loan, then compensate for the risk of higher interest rates.
Mortgage loans are granted for a long period - from 5 to 35 years. During this time, as with housing, and with its owner, who wants the borrower on the loan, can happen anywhere. Accident, fire, natural disaster - in unexpected situations the borrower's family may be on the street, and yes even with a debt to the bank. Insurance apartments or houses from the risks of fire and bay water, and its owner - from the disability can shift the responsibility upon the occurrence of critical situations the insurance company.
Mortgage insurance is a prerequisite for obtaining a mortgage in most banks. This should not be construed as an additional financial burden, but as a tool for real protection of the interests of the borrower and his family in the event of unforeseen circumstances.
Mortgage insurance contract is between the insurance company and private person - the borrower, but compensation for an insured event will not insured, and the bank. The premium for the integrated mortgage insurance can make 0,5-0,8% of the loan amount.
With mortgage insurance home remains the borrower or his relatives. In the event of the insured event (illness, death, fire, etc.) the insurance company will pay the bank the remaining loan debt, pay restitution in the event of loss or damage to property.
Saving on insurance policy when you make a mortgage is not: mortgage insurance increases the loan amount is insignificant, and provides reliable protection.
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