Read this tip to make your life smarter, better, faster and wiser. LifeTips is the place to go when you need to know about The Mortgage Insurance Application Process and other Mortgage Protection Insurance 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.