Ditech : Mortgage Life Insurance Protection

Mortgage life insurance is an insurance policy taken out on the life of the homeowner who has obtained the mortgage. This mortgage life insurance policy is aimed at paying any outstanding mortgage debt upon the death of the insured. To protect their investments, many companies provide mortgage life insurance in association with an insurance company. This mortgage life insurance ensures that the balance mortgage is comes from the insurance company in the event of death of the borrower.

There are two types of mortgage life insurances that borrowers can opt for, namely decreasing term insurance and level term insurance. Borrowers can choose among these on the basis of the kind of mortgage they have obtained that may be a repayment mortgage or an interest only mortgage. Decreasing term insurance is exclusively created for the borrowers who have taken a mortgage. This is preferred by mortgage borrowers because as the balance on the mortgage decreases, the coverage also decreases. This makes sure that at any given time, there are sufficient funds to pay off the balance in case the borrower dies. Level term insurance is for borrowers who have an interest only mortgage. The sum of the coverage remains the same, as the principal never reduces.

Terminal illness benefits are included in both the types of mortgage life insurance to protect the borrowers against having to repay the mortgage in case of any terminal illness. Critical illness coverage is an option that can be added as an additional coverage along with the policy or even as a stand-alone coverage. This allows the borrowers to receive payments in case they are diagnosed with a critical illness. Mortgage life insurance offers protection against the survivors of the borrowers losing their homes, if they are unable to make the monthly payments.

Ditech : Mortgage Loan – Factors Affecting Your Payment

The amount you pay each month for your mortgage is based on a number of factors. These factors include your interest rate and term length; here is what you need to know about these two important aspects of your mortgage.

Your mortgage payment amount is determined by the amount you borrow, the term length you select, and the interest rate you choose. To understand how your mortgage is repaid you need to understand the way mortgage loans are amortized.

Amortization can be a scary word. Amortization describes the process of repaying your mortgage loan. A mortgage loan is front-loaded with interest payments. This means in the beginning of the loan you will pay more to interest than you will to repaying the principal balance of the mortgage. This is why term length is important to your loan amortization.

Mortgage loans with longer terms have lower monthly payments. This is simply because repayment is spread out over a longer period of time, such as thirty years. The downside of a thirty year mortgage versus a fifteen year mortgage is that you will pay more to borrow the same amount of money. Your mortgage lender wants their interest paid up front; with a thirty year mortgage less of your money is applied to repaying principal than with a fifteen year mortgage. This concept is easily demonstrated graphically using a good mortgage calculator such as the one found on RefiAdvisor.com.