If you are planning to take a home loan mortgage broker in Sandhurst, you could be wondering if you need a home loan protection. Although some say that it is not as important, it is actually important as it covers you and your family in various ways. Just like you need car or health cover, it’s important you consider having loan protection.
What is Home Loan Insurance?
This is a plan that will cover the outstanding loan liability. It protects the borrower from loss of collateral and properties. In the event that the borrower dies, the family will not be left with the burden of repaying the loan. Instead, the bank will deal with the policy provider.
Why consider a home loan insurance
Whether you will manage to pay the loan in a timely manner or not, it’s crucial that you get a home loan protection scheme. This will give you peace of mind knowing that you are covered. There are many other reasons you should purchase this kind of policy.
It Helps In Repaying the Loan
If a person has applied for a home loan and unfortunately they pass on, they leave the family in agony and debt. The family may not even have the means of repaying the loan. This could add insult to the injury as the family loses out on the home. With a home loan protection, things will be easier for the family. The assets you have given as collateral will not be seized and the family will be able to settle the outstanding amount which will be released by the insurance company.
It’s Easy to Make Payments
At times it may not be possible to make a single settlement for your home loan protection. This should not be the reason for not taking the protection. It is possible to make monthly contributions towards the premium. Your financial institution will add the premium to your home loan which means you will be paying it on a monthly basis. This will be easier to have a loan protection than you thought.
Protects the Collateral
When the person repaying the loan can no longer repay it or they have passed on, the financial institution seizes collateral and even assets owned by the family. The advantage of having a home loan protection scheme is that it will protect these assets or collateral. If collateral was another property, it will not be lost as the outstanding amount will be settled by the insurer.
well worth considering a home loan protection scheme although it is
not mandatory when applying for the loan. This will give you peace of
mind, it protects your property, it is easy to get and you know that
your family will not be losing this valuable asset even when you are
gone. When purchasing the insurance, it is important you understand
the details and know that, you are not insuring your home, but the
loan. This is something people often mistake.