Safeguarding Your Home: The Importance of Mortgage Protection Insurance for New Homeowners.

As a new homeowner, you’ve taken a significant step towards building your financial future. While life insurance is often considered essential, many overlook the important role that mortgage protection insurance can play in safeguarding your investment and your family’s security. 

This article explores why new homeowners should consider adding mortgage protection insurance to their financial toolkit. We’ll discuss the risks of owning a home and how this insurance can help. By the end, you’ll know if this coverage is right for you and how it can protect your home and your family’s finances.

The Risks of Owning a Home

When you buy a home and take on a mortgage, it’s important to think about how you are going to protect your finances. Your mortgage is likely to be your biggest expense, and unexpected issues can make it hard to keep up with your repayments. Problems like job loss, illness, or injury can affect your ability to work and pay your mortgage.

Not being able to pay your mortgage can also hurt your credit score, making it harder to get lending in the future. Falling behind on mortgage payments can also lead to more financial stress you really don’t need, and in the worst case scenario – possibly losing your home.

How Mortgage Protection Insurance Helps

Mortgage protection insurance (also known as mortgage repayment cover), is a type of insurance that acts as a safety net for homeowners, helping to cover your mortgage payments if you can’t work due to illness, injury, or job loss. This type of coverage is especially helpful for first home buyers, families with one main income earner, and those without significant savings. 

You can customise your coverage amount, waiting period and how long the payments last, to fit your mortgage and financial situation. Some policies even cover household expenses, helping you maintain your lifestyle during tough times. Some insurers have a maximum monthly amount that you are able to cover while others will simply insure your total payment amount.

Making a Smart Choice with a Mortgage Protection Plan

By working with our experienced Insurance Advisers, you can get the benefit of a Mortgage Protection Plan tailored specifically to your financial situation. We will take you through a comprehensive review of your current financial safety nets to check what other financial protections you have in place, like savings, or other disability insurance. These might already help cover your mortgage payments in emergencies.

We will then consider how mortgage protection insurance fits into your overall financial plan. While it offers peace of mind, we also need to make sure to balance it with other financial priorities. The aim here is to create a Mortgage Protection Plan that suits your family’s needs and goals now and in the future.

Conclusion

Mortgage protection insurance is important for protecting you as a homeowner from unexpected financial issues. 

It helps cover your mortgage payments if you face illness, injury, or job loss. You can also customise your coverage to fit your own situation.

We can help you to make a decision on whether mortgage protection insurance is right for you, by evaluating your current financial safety nets, analysing the costs and benefits, and considering your long-term financial goals. 

We may even be able to combine mortgage protection insurance with other covers to make sure you and your family are fully taken care of in the event you are unable to work and earn an income. 

By doing this in consultation with our experienced Insurance Advisers, you can be rest assured that we will create a plan that helps protect your home and secure you and your family’s financial future.

Get in touch if you want to get started on creating your Mortgage Protection Plan today!

FAQs:

Is mortgage protection insurance worth it?

Yes, it provides peace of mind by ensuring you can keep making mortgage payments, similar to how house insurance protects against disasters.

Do I need mortgage protection insurance?

It’s not required, but it’s important to think about how you’ll manage mortgage payments if you lose your income. This can be through mortgage protection insurance or other types of cover which an Insurance Adviser can go through with you.

What’s the difference between Lenders Mortgage Insurance (LMI) and Mortgage Protection Insurance?

Lenders Mortgage Insurance protects the lender if you default on your loan, while Mortgage Protection Insurance covers your mortgage payments if you can’t pay due to specific reasons like illness, loss of income or disability.

Do I need a mortgage to get mortgage protection insurance?

No, mortgage protection insurance can also be used to protect your income.

Applications for risk insurance is subject to an application being accepted by an insurer and if a policy is issued their terms and conditions being agreed to. Refer to our website www.hbmi.co.nz for our Public Disclosure Document.