mortgage insurance (home loan, premium, financial, loan)

[kcam213]

I am in the process of applying for home loan.

I presently pay 2 different disability insurance policies in order to replace my income in case I was unable to work.

I have recently had several raises that now even the 2 policies would not replace my income.

I was thinking about a mortgage insurance similiar to ones offered when I bought my car... you know the kind that will make your payment if you are unable to work.

If I cancel 1 of my policies and go with a mortgage insurance that would cover the mortgage... that would be enough... since the mortgage would be my greatest expense.

Does anyone have this type of insurance? How much are the premiums? Will the payments be rolled into my mortgage? Would I have the option of cancelling the insurance without renegotiating terms of my mortgage loan?

[golfgal]

You are MUCH better off getting a good disability policy that would replace your income. If you pay the premiums yourself the benefits are not taxable and therefore if you get say 80% income replacement you are financially in a good position. Also check your current policies to see if they have future income growth adjustments.

Mortgage insurance is really just a decreasing term life insurance policy. They are generally more expensive then a level term policy and not really worth buying. If you want to buy mortgage insurance just get enough life insurance through a private carrier like your home insurance carrier to cover your mortgage and other expenses.