Mortgage Life Insurance

Mortgage life insurance, also known as mortgage protection insurance, repays a mortgage if the borrower dies during the repayment period.  The product is sometimes offered during the application process or by various providers after you close on your loan.

The policy provides survivors with peace of mind in the event of an untimely death – it covers the loan to the lender, and your mortgage is repaid in full.

Although this product may sound like a good idea for everyone, other options may be more cost-effective or valuable.

Ultimately, mortgage life insurance is simply term life insurance in place for a set period of time, such as 15 or 30 years, before it expires.  In most cases, the period of time the mortgage life insurance stays in effect coincides with the term of the mortgage. 

Unlike standard life insurance, mortgage life insurance requires minimal underwriting. Medical examinations or blood samples are generally not required at the inception of the policy, a critical distinction for homeowners with serious preexisting conditions.

However, the benefits from mortgage life insurance often decrease with the mortgage balance while the monthly premiums do not.      Additionally, the death benefit is generally paid directly to the mortgage lender. Mortgage life insurance can also be more costly than other options mostly because of the minimal underwriting requirements.

Life insurance is a much needed product and can provide great security to individuals and families.  If you are considering mortgage life insurance, it may be best to consult with a financial advisor to determine the best protection for your unique circumstances.

Have more questions?  Call me!

Guaranteed Home Mortgage is a Direct Lender licensed by the PA Dept. of Banking

Dan Ranck

Guaranteed Home Mortgage Company, Inc.

5513 Main Street

East Petersburg,PA17520

Telephone 717-271-2400

Toll-Free 1-888-566-1795

Fax 1-888-275-8495

www.DanRanck.com

dranck@ghmc.com

NMLS # 140989

Yes, No, Maybe So

The time has come to purchase your first home. Initially, a simple three-step process seems sufficient: you contact a real estate agent; you contact a mortgage lender for a pre-approval; and you go looking at houses.

Even though you are pre-approved by a lender, after several weeks, you decide to shop around. Much to your chagrin, your new lender turns down your mortgage application. So what happened?

In most cases, a pre-approval remains valid for only 60-to-90 days and is based on information obtained at the time of the initial application such as credit and income.

The second lender, however, may obtain different credit information on the borrower than the first one. Credit reports are updated at least once per month and, depending on your use of credit cards and payment activity, your credit score could change significantly during that time.

If your credit score drops, it can affect your mortgage pre-approval, especially if the initial application relied on a credit score at the low end of the qualification spectrum.  One or two negative activities on your credit file could immediately drop you to the non-qualified range.

When something like this occurs, it creates a great deal of negativity and dissatisfaction for all parties involved.

Lenders can avoid these situations by providing more detailed information to borrowers at the time of issuing the pre-approval such as their exact credit score and any potential impact of a score reduction on their overall qualification.

A mortgage pre-approval should incorporate proper measures to ensure that Yes, doesn’t become a NO, or Maybe So.

Have more questions?  Call me!

Guaranteed Home Mortgage is a Direct Lender licensed by the PA Dept. of Banking

Dan Ranck

Guaranteed Home Mortgage Company, Inc.

5513 Main Street

East Petersburg,PA17520

Telephone 717-271-2400

Toll-Free 1-888-566-1795

Fax 1-888-275-8495