Read these 3 The Mortgage Insurance Application Process Tips tips to make your life smarter, better, faster and wiser. Each tip is approved by our Editors and created by expert writers so great we call them Gurus. LifeTips is the place to go when you need to know about Mortgage Protection Insurance tips and hundreds of other topics.
When you apply for Mortgage Insurance, your application must go through an evaluation and approval process. This is referred to as underwriting. While your Mortgage Insurance application is in this stage, the underwriters attempt to determine the risk that you pose to the insurance company. That will determine whether or not you're approved and how much your premium is.
As an example, let's say we have two applicants for Mortgage Insurance. One of them is a 35-year-old non-smoker with no medical history. His weight is within the target range for his height and he works full-time in an office. Our second applicant is a 55-year-old construction worker who smokes and is taking medications for high blood pressure and cholesterol. When looking at the objective facts, you know that the 35-year-old is less likely to die of natural causes during the term of the Mortgage Insurance policy because he's in great health. We also know that he isn't likely to have a work-related accident that results in death. The same cannot be said for the 55-year-old who's already at risk for heart disease as well as an at-work accident. Since the 35-year-old presents less risk to the insurer, he will enjoy cheaper Mortgage Insurance rates.
When shopping for life insurance that can protect your family from losing your home after your death, it's important that you understand the difference between Mortgage Insurance Protection and mortgage life insurance.
Mortgage Insurance Protection is a term life insurance policy that pays a specified death benefit to your named beneficiaries if your death should occur during the term of the policy. Your death benefit can exceed the value of the mortgage of your home and can be used by your named beneficiaries for whatever expenses they see fit.
Mortgage life insurance is a term that often describes a life insurance policy that is used only to pay off your mortgage in the event of your death. The beneficiary is the bank that issued your mortgage, and the funds must be used exclusively on paying off the mortgage.
One of the items you'll need to discuss when completing your application for Mortgage Insurance is whether or not you have done, or plan to do, any foreign travel. While some foreign travel is a non-issue when you're applying for Mortgage Insurance, some areas of the globe are considered higher risk, and travel there could affect the Mortgage Insurance company's willingness to approve your policy.
If you've traveled abroad or plan to, be prepared to complete an additional Mortgage Insurance application form generally called a Foreign Travel Questionnaire. This form will have questions about the location you plan to travel to, how much time you plan to spend there, and the reason you're traveling. It's important to remember that the Mortgage Insurance company is not trying to be invasive when asking you to complete this form. They're simply trying to determine if the travel will impact your safety. They may issue a temporary extra premium or decline the policy until the trip is completed.