To realize its real estate project, you must obtain a mortgage and a loan insurance. The loan insurance will be put into play when a risk such as death, injury or illness occurs.
The credit institution may also require collateral such as a bond or mortgage and will be implemented if the loan is not repaid.
1. Why insure a mortgage?
The mortgage insurance protects the borrower and his family. Thus, in case of death, accident or illness, the insurance covers the total or partial repayment of the loan depending on the contract signed.
This insurance makes it possible to avoid financial difficulties that could lead to the sale of the property to repay the lender
2. When seeking a mortgage insurance?
To accomplish with confidence its real estate project, you need to plan the search for lassurance before signing the sales agreement and without waiting for the acceptance of the loan.
This allows the borrower to:
To compete more contracts by comparing the offers (guarantees, benefits, prices ?)
Save time if you must answer detailed questionnaires on the health and perform additional medical examinations
Know in advance if you are insured and under what conditions: level of coverage, exclusions, or specific standard rate.
3. What type of mortgage insurance purchase?
The loan insurance can cover various risks: death, disability, incapacity, loss of employment. Before purchasing, it should check with their advisor and read the information leaflet of the insurance contract to understand all the terms of insurance.
Life assurance covers not only the death but also disability cases extremely serious, called ?total and irreversible loss of autonomy? (TILA). In both cases, it pays to the borrower instead of the capital outstanding at the credit institution. It is essential to the security of spouse, co-borrowers, children or dependents.
Disability Insurance / incapacity for work supports the repayment deadlines if the result of an illness or accident, the borrower is unable to carry on business or any other paid activities a non-final or partial.
The extent of the guarantee and the concept of disability / incapacity for work included in the contract.
Insurance job loss is to support all or part repayment deadlines in case of unemployment. It comes into play under certain conditions and may cease when the insured reaches a certain age. The conditions for compensation are different depending on the contract.
Note: The death and disability insurance may be required by the credit institution where the demand for mortgage insurance when job loss is optional.
4. How can a mortgage?
If the mortgage is established on behalf of several persons (co-borrowers), the proportion of the sum insured for each must be specified. This concept is usually expressed as a percentage, ?is every man for all the capital (time x 100%). Thus, in case of death of one of the co-borrowers, the insurer will pay the entire outstanding principal, ?or for each part of the capital. For example, if everyone is insured up to 50% in case of death of one of them, the insurer will pay half of what remains due.
If the borrower takes with her husband, it is recommended to ensure each for the total loan amount (each 100%) or at least to ensure 100% one with the most revenue.
5. To insure that the mortgage?
It is possible to take out insurance to mortgage credit institutions, insurers and brokers.
The credit institution, which was filed with the loan application may offer a loan insurance (group insurance or individual).
The insurance group is a group insurance contract negotiated by the bank with an insurer for the benefit of its customers. Membership formalities are simple and if put into play the insurance, the management is facilitated.
It is possible to offer the bank a specific individual contract underwritten by an insurer of choice of the borrower. The insurer designates the credit institution as the beneficiary of capital guaranteed by issuing a ?delegation of insurance.? This document is signed and accepted by the credit institution, the insurer and the borrower agree to respect each other. The insurer agrees to pay the amount due to the credit institution, in case of death, for example, and to inform in case of non-payment by the borrower.
Do not hesitate to question its bank advisor for more information.
Note: If the insurance is chosen other than that proposed by the bank, it should present a level of coverage equivalent to that of the group contract.
Good to know: a standardized information sheet must be delivered consistently by all professionals since that is sought insurance for a mortgage. It presents the benefits offered and an example of personal cost of insurance, it is easier to compare offers. You can also file an application to different insurers.
6. What are the things to check in an insurance contract mortgage?
Regardless of the contract, it must be read carefully. You should check the extent of coverage offered and the terms of management of loan maturity in the event of work stoppage or exclusion of certain activities.
We must carefully check all assi exclusions whether general or personal following consideration of the case.
Source: http://www.your-mortgage-calculator.com/blog/2011/11/mortgage-insurance-for-a-successful-project/
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