Mortgages - The Complete Beginners Guide

Mortgage insurance is a type of insurance policy that provides coverage for the borrower of a mortgage loan. It is designed to protect the borrower and their family against financial loss in case of death, disability, or illness that prevents the borrower from making mortgage payments.

There are two main types of mortgage insurance:

1. Mortgage life insurance: This type of insurance pays off the mortgage loan in case the borrower dies during the term of the mortgage. It ensures that the borrower's family can continue to live in the home without having to worry about making mortgage payments.

2. Mortgage payment protection insurance: This type of insurance provides coverage for the borrower's mortgage payments in case they become unable to work due to disability or illness. It ensures that the borrower can continue to make mortgage payments and avoid defaulting on the loan.

The level and type of coverage provided by a mortgage insurance policy will depend on the policy selected and the requirements of the borrower. It is important to carefully consider the different options available and compare policies from different insurers to find the best coverage for your mortgage at an affordable price.

Mortgage insurance is not mandatory by law, but it is often recommended for borrowers to protect their investment in the property and ensure that their family is taken care of in case of unexpected events.