Mortgage Protection Insurance
Mortgage Protection Insurance
As a homeowner, you pay for insurance to cover various worst-case scenarios that can negatively impact your property. Mortgage protection insurance (MPI) can be helpful if you’re unable to repay your mortgage due to an unseen tragedy. Don't let your hard earned equity go to the bank or tax collectors.
Differences Between MPI and PMI
Differences Between MPI and PMI
Mortgage Protection Insurance (MPI) is commonly confused with another abbreviation (PMI) or Private Mortgage Insurance. While the letters and terms for these insurance products are almost identical, they are different from each other. To sum it up, MPI protects you, and PMI protects the bank.
What Is Mortgage Protection Insurance (MPI)?
What Is Mortgage Protection Insurance (MPI)?
This policy functions as a type of life or disability insurance. The cost of the monthly premium changes depending on the amount of the mortgage, your age, and health status.
In general, MPI only covers the principal and interest portion of a mortgage payment. This means that other fees like HOA dues, property taxes, and homeowners’ insurance are still your responsibility. However, you might be able to add a policy rider to cover these expenses.
There are policies are that can help your loved ones in paying mortgage in the event of your passing. If you died while having a remaining balance on your mortgage, your loved ones won’t have to worry about making the remaining payments. With MPI, your insurer pays the remainder of the mortgage directly to you, or to your lender so your loved ones won’t have to worry about making the remaining payments.