Buying insurance coverage for a mortgage balance makes good financial sense, but buying mortgage insurance from your bank is often expensive and limits your options. What’s worse, your health could change and your coverage could expire the next time you renew your mortgage. Banks love to sell mortgage insurance. While you do not have to purchase insurance in order to qualify and receive your mortgage, clients often say they felt pressured to buy the insurance and not look around for other options. When you purchase mortgage insurance through your bank, you’re actually limiting your options, and probably paying too much.
Compare bank insurance with other insurance options
Bank mortgage insurance products make the bank your beneficiary. That means that if you were to die, the bank pays off the mortgage, usually charging a substantial interest penalty for paying out your mortgage early. More importantly, you must provide medical evidence each time you renew your mortgage, or change financial institutions.
