Buying your first home is an exciting time- you’ll finally have a place to call your own and you’re done with renting and paying off someone else’s mortgage. However, it’s also a confusing event, with lots of paperwork, extra unexpected expenses, and decision-making. Finding your dream home can be difficult, but figuring out the “etc.” is what usually breaks those rose-tinted glasses in half.
One of the many discussions that are going to arise will be about insurance. Truthfully, you’ll probably have more than one, considering that there are so many different types of insurance that will come into play. Here’s a cheat sheet that can help you gather your bearings as you enter into conversations with lenders, agents, and even your partner.
● Life Insurance
Life insurance gives you peace of mind that if something were to happen to you, your family could continue to be taken care of and not feel the financial burden of your absence. It’s a portion of your income put away in case the worst was to happen. Life insurance is something to discuss when getting a home, because if you don’t get mortgage insurance, you need to ensure that the amount paid out monthly if you were to die or become ill, is at least equal, if not greater, than your monthly mortgage payments. This is something worth discussing with your partner if you have one, especially if you have young children.
● Mortgage Insurance
Mortgage Insurance is something that your lender will want to sell you along with your loan as a package deal, but really is independent of your mortgage payments. Mortgage insurance, in cases of death, illness, or disability (depending on the type), will cover your mortgage payments so that you don’t lose your home. You can save when choosing life insurance in Quebec for your mortgage by shopping around. Websites like Infoprimes calculate the mortgage insurance that you should be paying based on your lender, financing rate, loan amount, and duration of loan. Many homeowners overpay, so make sure you double-check that you aren’t being taken advantage of.
● Home Insurance
Home insurance, in its simplest definition, is supposed to protect your home from unexpected damages due to natural disasters like flooding or tornadoes, theft, and circumstances like fire. You might think that this isn’t something you’ll have to worry about until after you purchase your house, but that’s not completely true. Though you won’t need to pay it you officially own the home, it’s helpful to know whether your insurance company will take on your dream property (sometimes they won’t it they consider it too “risky”) and if so, how much it will cost per month. Sometimes the rates can vary so much between one house and the other that the additional expense might influence your decision. Whether or not you can get home insurance can also influence the decision of your lender, as they might not want to risk being stuck with an uninsurable property if worst comes to worst.
Now that you have all your insurances figured out, it’s time to get to work and acquire that dream home. When the topic of insurance comes up, make sure that you understand which is being discussed and then you can easily go from there. Insurance is an expenditure that many forget to add to the list of expenses that come with buying and owning a home. All things said and done, you need insurance to make sure that your investment into a home is being protected. However, it’s worth taking the effort to find the best fit for you, both in terms of lifestyle and finances on a monthly basis.
Author: Oliver Curtis
Hi there. I’m Oliver. I’m just a young boy from the outskirts of… Okay, that’s a lie, I’m not a young boy anymore, although I certainly feel that way at heart.