Bought a house and got a question (NF)

[Tarzan's Jane]

Congratualtions on being homeowners

 

I have both life insurance and mortgage insurance. I felt that my life insurance wasn't enough to leave anything for my boys but it would cover the condo and any other "debts" I have. So....I pay an extra $13.00 a month to have my mortgage insured...worth it to me.

Edited May 26, 2008 by twilight

[Headhunter]

Mortgage insurance is transferable to another property, should you decide to move. It is calculated based on your age at the original time of taking out the insurance, the only flexible part is the amount owed on your second mortgage... the calculation rate is based on your age at the time of the original insurance... clear as mud!LOL

My example:

Bought my first house in 1994, took out the mortgage insurance at that time. The rate charged was based on my age at that time. When we bought our new house last spring, the rate charged for mortgage insurance was based on my age back in 1994, with the increase in mortgage amount being the increasing rate factor.

There were a number of times in my old house, when I thought that since it was almost paid off, I'd just kill the Mortgage insurance... but was advised that if I was considering moving, to keep up the payments as the rate would be taken from the original time of insuring (1994).

Don't know if this helps, but what the heck!

HH

[misfish]

Congrats guys.

I have no info.LOL

 

Hope Im on the house breaking,mmmmmmmmmm I mean house warming party list.LOL

 

ENJOY

[Joey]

TONS of good info here and some terrific advice, thanks so much. I'm going to mull it over for the next few days on which avenue I'd like to take.

 

I also had a few PM's and got some sound advice and even a quote coming.

 

Thanks again, I knew I could count on everyone here.

 

And thanks for the well wishes also, we're kind of excited about owning a home now. Got some plans on painting and decorating etc. Looking forward to that.

 

I'll get back to you on the housewarming party Brian

 

Joey

[Beans]

Will there be a party ???...Will there be CAKE ???...Brian sez there will be a party !!!

 

Congrats Joey and Paul...

 

Too bad you didn't buy the house across the road or next door up here...bit much of a commute though...

 

Are you staying in Richmond Hill?

Edited May 26, 2008 by Beans

[aplumma]

Congradulations Joey and Paul glad to see that you all are now home owners. I can't help on the question but it looks like you got lots of help else were.

 

Art

[ccmtcanada]

Congrats!!! So, where did you end up buying?

[danbouck]

I pay $12 a month from Scotia for my insurance. The bank manager had shown me the rates and it gets quite expensive the older you get.

 

Edit - As long as you have it the rates never go up

Edited May 26, 2008 by Dan Bouck

[Bernie]

Hey Joey. Congrats on the house! I did purchase the insurance years ago. Peace of mind for me if something happened. But the advice I see to purchase a term policy looks good too. Been mortgage free for a year now.......... Funny, I still don't have any money? Where the hell does it go?

[motv8tr]

Congrats Joey and Paul!!!!

 

I chose to go the life insurance instead of mortgage ins., I found it less expensive and it covers me for more than my mortgage so there will be no debt left for anyone left behind when my time comes.....I hope

 

Maureen

[JohnF]

Great info guys, I really appreciate it. I'm learning alot here and am awaiting a quote from the broker. She also mentioned that the premium I pay if I go through the bank never goes down, yet the payoff of the mortgage does Doesn't seem quite right.

 

Joey

 

I think that's the key. Even if it looks okay now (the premium) it won't look like such a bargain in a few years as the principal drops. Term is yours to take with you whether or not you sell that house and the payout (Heaven forbid) isn't tied to the mortgage balance. Conventional wisdom always favours the term vs insurance through the bank.

 

JF

Edited May 27, 2008 by JohnF

[Dutch]

Sorry Joey. I haven't had a chance to read all the posts to this thread before responding, but still want to offer my opinion:

 

Do NOT have life insurance on your mortgage through a lender. Instead go get an independant term life policy that will pay out and cover the mortgage on either mortgage party's life. It will be much, much cheaper. Typically, they charge a flat fee based on the initial value of the mortgage, but the issue is that the mortgage declines as you make payments lessening the insurance coverage, but the fee you pay does not decline with the mortgage balance.

 

You can get out of the insurance you are in - there is some type of "cooling off" legislation in place for insurance policies, but I'm not sure about the timeline - may be as little as 5 days, so you need to act fast.

 

I'm not sure about the disability part - that needs to be your own decision based on individual facts.

[spooner_jr]

Before you decide to go with mortgage insurance through your lender, you may want to check out the link below. Marketplace did a show on what it was like trying to collect when there was a claim. The gyst of it is the underwriting process starts when a claim is made, and if there is anything at all that was not disclosed at the time of the application, the claim is denied.

 

http://www.cbc.ca/marketplace/2008/02/06/in_denial/

[Joey]

We bought in Richmond Hill. I love this area and am close to mom and work.

 

Spooner Jr., that is a very disturbing report. Hmmmmmmmmm, I'm calling them in the morning.

 

Thanks again,

 

Joey

[John Bacon]

When I bought my current house, I was quoted over a hundred dollars a month on a $235K mortgage. I ended up getting a $250k double life policy on my wife and myself from a broker for under $50 a month. The mortgage is now less than $200k, but my policy is still $250k.

 

Definitely contact a broker before you think about dealing with the lender on insurance.

[Mike the Pike]

Joey and Paul congrats on your new home.

 

OK ladies and gentleman yes seperate life insurance sounds better right well I am not sure about this one.

 

My mortgage insurance costs me about $12 a month peace of mind I say.

 

Your spouse dies and the house is paid off quickly the lady at the bank said it would take one week to settle the estate.

 

Now with private insurance this could drag on for months before the insurance companie pays.Now I am not sure of the answer

for one I am not in the insurance business but I have known friends who have had cars and a motorcycle stolen and it took 3 to 4 months

to get a cheque in there hand.Perhaps someone from the insurance industrie could elaborate on how long it would take to settle.

 

Although the bank does not sound like a bargain the house is paid for quickly.

 

Now in this day and age it takes 2 salaries to pay for these overpriced homes.

Do you want to leave your loved one with the extra finacial burden of high payments

until all is settled from the insurance????

 

So lets say it takes the private insurance company a few months to settle and now you are paying all the bills on one salary

I think it would be pretty tough to keep up with all the payments until the insurance settles.

 

So hopefully someone in the insurance business can tell us how long a claim can take.

 

I do know with my bank it will be fast no hassle and no worries.

 

I am going to have to say go with the bank Joey.

 

Enjoy the new home.

 

I owe I owe so off to work I go

[OhioFisherman]

Congrats Joey and Paul. Stuff can happen, usually at a bad time. Been out of work due to injuries a couple times, had the death part but not disability, savings can go pretty quickly even for someone as cheap as me.

 

Bad thing is you never know when something that doesn`t seem too bad can turn out to be career ending.

[Garyv]

Congrats on the house. For what it's worth I'm not a mtg lover, and prefer a PLC instead, however what we did was save a whole lot of dollars years ago when we were buying and selling property by using term insurance. Another way to really save dollars in the long term is to make double payments a month. You will be surprised how much interest you will save and the time duration that it cuts off until paid in full.

[fishnsled]

Everything has been pretty much covered so I'll just add my congrats to you and Paul!

 

I should add here that I do also have the insurance you are asking about. Mainly for piece of mind should I have a heart attach, cancer etc the mortgage will be paid off and one less thing to worry about.

Edited May 27, 2008 by fishnsled

[icefisherman]

I am against any insurance in general and only buy them when have no other choice...like car insurance....about to renew my mortgage and have never had /will never have insurance on it. Better spend the same amount on paying your mortgage faster

 

Congratulations on the new house!

 

Cheers,

Ice Fisherman

[BITEME]

CONGRATULATIONS!!!!!!!!!

[Joey]

My mortgage insurance costs me about $12 a month peace of mind I say.

 

I am going to have to say go with the bank Joey.

 

Thanks Mike, and if it were only $12 per month I'd have no problem with it, but, in fact, it is $170 per month, which I think is almost highway robbery. I'd be better putting that toward my morgtage each month. Then on top of that they want the disability at $135.00 per month.

 

This is why I'm having my second thoughts about it.

 

Joey

[Headhunter]

Joey, those numbers are way off the mark! I'm sure that with some investigation, you could do much better than that!

HH

[Squid]

Congrats Joey and Paul on buying a new home!!

[fishnsled]

I'd agree with Joe on this as well. I think I'm paying around $40 a month, I'm with TD.