There are so many choices it can make your head spin. Some types of insurances are optional in a home purchase - others are a matter or picking the best option. Here's a top-line comparison to give you an idea of the differences.
Mortgage Loan Insurance (aka High Ratio Insurance) is required by law i the mortgage is more than 80 per cent of the appraised value of the property. It covers the Lender in case of mortgage default.
Mortgage Life Insurance (aka Creditor Life) is designed to pay off the principal sum of the mortgage in the event of tragedy. The drawback is that the payments remain the same for the life of the mortgage, even though the principal amount of the mortgage decreases through amortization.
Life Insurance is widely available to protect families. It's not to a specific property of Lender. Unlike Mortgage Life Insurance, the amount doesn't decrease as the mortgage balance decreases and, if needed, a payout can be applied where best needed.
Title Insurance protects the property owner and Lender against losses related to the property's title or ownership. We'll cover this type of insurance in more detail in future posts.
Homeowner Insurance protects the property ad valuables, as well as providing liability protection. Think of it as protection against the possibilities. This type of insurance is usually a must-have as part of the mortgage covenant.
Get to know the options as there will be differences in premiums, coverage, and benefits.