Christian Mortgage Protection Insurance
Christian mortgage protection insurance is a guarantee that the house will be paid off in the event the person that has the policy dies. It is not unusual that only the breadwinner of the family has this sort of coverage. It is roughly .005% per month of the beginning mortgage amount. Mortgage protection ensures that if the person holding the policy dies that the covering company will pay the amount left to be paid in full.
This is something that does not have to be purchased as soon as a home is bought. Mortgage protection can be started at any time providing the health of the person needing the insurance is at least fair. Just like life insurance. rates go up if the person covered is a smoker or fit other health concern categories. As the house is paid for the cost of coverage goes down. The company will usually adjust the payments based on roughly the .005% that is still owed on the loan.
If the house gets paid off early there still may be benefits to the survivors if the person covered dies. Each mortgage protection insurance company works differently so check their policy to be sure about extended benefits. This is a great way to let people relax about their needs in the unfortunate event that someone may die.
Keep in mind that this type of coverage is not a full life coverage. Mortgage protection will only pay off the amount to be paid on the house if there is money still owed. It will not pay for final expenses, other debts, etc. If a person is POSITIVE that the life insurance already taken out will cover EVERYTHING when the person covered dies then there is no need for mortgage protection insurance. If it is unclear about how the funds will be distributed or when they will be available then research the options. Most companies will have policies that won't let a person fall behind on payments just because of legalities. They want to make the life transition is as easy as possible concerning paying off the house.
God asks His people to take out insurance on life by believing in His son, but it is also important to have insurance on the lives of family who get left behind. This type of coverage can help make the transition easier. The best thing to do is check out what current coverage the breadwinner in the house has and compare to what the alternative can offer. It is not unusual for a family to hold both life insurance and mortgage protection insurance. Remember: Coverage can be started at any time after the mortgage payments are in place.
Mortgage insurance allows buyers to get more for their money with a lower down payment. Many buyers today cannot afford to pay twenty percent down to purchase a home. Choosing insurance for a mortgage is not just an option; it is required when purchasing a home with less than twenty percent down. Often referred to as PMI, private mortgage insurance will be added into the consumers monthly payments until the loan has amortized to 78% of the original value of the home. PMI is a measure to protect lenders on loaning to buyers who have less than 20% down, which is considered to be a high-risk loan.
If the buyer defaults on the loan and the property goes into foreclosure and must be sold, insurance repays the money to the lender. The majority of buyers do not have 20% down and if not for PMI, most of the United States would be renting and real estate demand and values would be drastically less than they are today. When it comes to mortgage insurance, the lender chooses the underwriter. Buyers cannot shop around for PMI and even if they did, they would discover that coverage is essentially the same no matter who the insurer is.
Luckily, the borrower can request to cancel PMI when the loan balance is paid down to 80% of the original property value. According to Federal law that was passed in July of 1999, insurance ends automatically when the loan is paid down to 78% of the original house value. Premiums are based on the amount of the loan. Some lending institutions offer the option of paying a higher interest rate over the life of the loan in lieu of insurance. The interest rate will be high enough to cover the lender-paid premiums as well as turn a little profit for them. In this respect, mortgage coverage would be the wiser choice if the consumer does not have a 20% down payment on the home that is being purchased.
The median home price in the United States for the average single family home is $207,000. Twenty percent of $207,000 is a healthy chunk of money. Many families that need to upgrade to a larger home do not have the required twenty percent down payment. Mortgage insurance can be a lifesaver in this situation. When purchasing a home with less than twenty percent down, the consumer must be faithful in making monthly payments to whittle away at the balance, and soon it will be possible to cancel the insurance, leaving the consumer with a lighter load of a mortgage payment. "A faithful man shall abound with blessings..." (Proverbs 28:20)
Christian Mortgage Life InsuranceMortgage life insurance pays off the mortgage or pays the balance down a great deal in the event of the death or long-term disability of the borrower. With any policy like this, the lender is the beneficiary. This is a precaution so that the family left behind will not be left in financial turmoil. Without mortgage life coverage, if the borrower is not able to make the required payments in the event of severe disability or death, the loan will fall into default, resulting in foreclosure. To obtain insurance below the amount of $100,000, the consumer is not usually required to submit to a physical examination. Most mortgage lenders require the borrower to obtain a policy to avoid the financial risk to the company and to the borrower.
The type of coverage that a consumer will need depends on the type of loan they have. The most affordable is the level premium, level benefit term policy. The individual can choose the number of years allowing them to receive coverage for the entire term of repayment. Mortgage life insurance will give the consumer and his or her family peace of mind to enjoy the home the way they should. Most insurance premiums and coverage are reduced annually by a certain percentage. Premiums are based on the individuals age at sign up and with most policies, premiums do not increase.
Policies of this nature are like term insurance in that they do not accrue cash value like a whole life policy. The consumer can choose a decreasing benefit to match the mortgage balance at the beginning of each year. With the benefit decreasing as this balance decreases, the premiums will cost less than their non decreasing mortgage life insurance counterparts. As an alternative, term life insurance that covers the mortgage amount and length can also be considered. Consumers find this to be less expensive overall.
Another benefit of conventional term life insurance is that the benefit amount remains the same through the term of the policy. In conventional term life insurance policies, the beneficiary is usually a spouse or a child, and they can choose what to do with the benefit. It is a good idea to speak with a lender about mortgage life insurance. They can fill the consumer in on all the different types of policies so that the individual can make a wise choice. "Do therefore according to your wisdom" (1Kings 2:6)
Mortgage financing is one of the best ways for a home owner to improve his monthly budget. There are many different types of loans available to those who want to purchase a home, but need to borrow money to do so. Most Americans use home loans to purchase their houses and mortgage loans with interest rates are a large portion of how the American economy is stabilized and managed. But the financial market is changing and now the Internet has become the main source of information for these types of loans. There are many programs available that offer contracts for those who may have trouble getting a mortgage or working with a lender to buy a home.
A consumer can choose from a variety of packages. There are conventional loans, which offer standard terms for mortgage financing that normally require a down payment. There are FHA loans to new homebuyers who could have a problem qualifying for a conventional contract. FHA home loans are guaranteed by the Federal Government, but extended to the public by general lending agencies. There is also interest only home loans and refinance loans. Even people with poor credit who may believe that they cannot qualify for financing can find deals. And there are equity loans for existing homeowners who want to take out funds, resulting in a second mortgage.
Traditionally, most people used a local or community lending company to get their financing. But with the absolutely huge market that the Internet brings into one single home, the dynamics of mortgage financing have changed. Now, homebuyers can shop online to get the best deals available and homebuyers can get those great terms from almost any city in the United States. As long as a company can legally operate in a state, they can sell loans to anyone in that state. Electronic mail and communications have opened the door to a nationwide market, partnering clients in California to lending companies in New York, and so forth.
The Bible teaches us to put our trust in God for all things. The Christian who is considering mortgage financing must first seek God for His wisdom and direction. Proverbs 3:5-6 exhorts us, "Trust in the Lord with all thine heart; and lean not unto thine own understanding. In all thy ways acknowledge him, and he shall direct they paths." We can trust that He will only guide us in the ways that are best for us and in ways that will benefit our spiritual growth and our family's welfare.