Why is Mortgage Insurance Required With Condos for Sale?
If you are considering the purchase of one or more condos for sale in your area, you have noticed that the financing terms include the need to carry mortgage insurance. This is actually a provision that benefits you as well as the lender offering the financing. Here are some examples of how this type of protection can make a big difference.
If you should sustain an injury that makes it impossible to work for an extended period of time, those payments that you took on when purchasing one of those condos for sale will suddenly be very hard to manage. Rather than defaulting on the mortgage and losing your investment, the right insurance protection will make those payments for you. Once you are back on your feet and able to return to work, you can begin making those payments again, without worrying about being in arrears.
When you made a decision to purchase one of the condos for sale, your expectation was that you would remain healthy enough to earn a living and honor the terms of the mortgage loan. Should you become permanently disabled and no longer able to generate that income, the right type of mortgage loan insurance plan will cover the cost of those payments, up to a certain amount. That greatly increases the chances of being able to hold on to your home. At the same time, the coverage also ensures that the lender does not begin to lose money on the mortgage.
Some forms of mortgage insurance included clauses that are known as critical illness coverage. Assuming that your condition meets the terms related to this part of the insurance contract, you could receive a lump sum that can be used to settle the mortgage in full. That will take an enormous amount of financial stress off you and your family.
Should you pass away suddenly, the mortgage insurance will provide benefits that help to settle the remaining balance on the loan. This means that your spouse or legal partner does not have to worry about finding the home that the two of you shared being placed back on the market. This benefit allows you to know that your family won’t be out on the street if you are gone and no longer in a position to offer financial support. Here is more information about Toronto’s spring real estate market 2014.
The bottom line is that the right mortgage insurance will make payments when you are not able to do so. As long as the reason behind the inability to pay is related to one of the events defined in the policy terms, you will be able to retain possession of the condo and the lender will not be out a single penny.