Mortgage Protection

Your home is one of the most important purchases you will ever make. In addition to the investment value of a house, this structure also becomes the heartbeat of your family, providing shelter and a safe place to gather. So what happens when you can no longer make your monthly payment? That safe haven can be taken by the bank that holds the mortgage on your property. The good news is that you can take steps to protect yourself, by purchasing mortgage protection for your loan.

What is Mortgage Protection?
Mortgage protection, also known as MPPI, covers the monthly payments on your mortgage if you become unable to do so due to illness, injury or unemployment. The cost of the mortgage protection is much less than that of other types of income protection insurance, and covers a broader range of situations. Most mortgage protection covers payments for anywhere from 12 to 24 months and can prevent repossession during difficult times.

According to the Council of Mortgage Lenders, repossessions in the UK hit a 12-year high last year. More than 40,000 properties were lost in 2008 alone, and predictions place repossessions in 2009 even higher. There is no better time to protect your real estate investment with the purchase of mortgage protection. With this insurance policy in hand, you can rest assured your home will be able to withstand the current economic crunch, no matter what circumstance might come your way.

Some homeowners believe that mortgage protection is unnecessary, since government benefits will cover the payments until they can get back on their feet. However, the government also provides its own set of guidelines for assistance that make it more difficult for many homeowners to receive help. For example, if you have a partner who can cover the mortgage or you have an ample savings account, you probably won't be eligible for assistance. On the other hand, mortgage protection will kick in much more automatically, offering greater peace of mind and prompter benefits for homeowners in trouble.

Mortgage protection is commonly sold by lenders at the time a mortgage loan is issued. However, today's guidelines allow a borrower 14 days after closing their mortgage loan to shop around for the best mortgage protection deal. In some cases, the most attractive policy might be with the lender who holds the mortgage. In other cases, it may be through an entirely different company that specializes in mortgage protection insurance. It is important to shop for the best rates to ensure you get the best insurance value for your dollar.

Mortgage protection typically does not cover mortgage payments in the event of the death of the primary breadwinner. However, additional mortgage life insurance can be tacked on for just such a situation. Homeowners can choose policies that will pay out mortgage payments for anywhere from 12 to 24 months, allowing homeowners to regain financial stability on their own. With the right mortgage protection in place, you and your family can rest assured that your home will be safe no matter what circumstances in life might befall you.