Mortgage Payment Protection Insurance: How It Works

Many people are in the process of buying a house or refinancing their home loan and don't know much about the protections they have if something unexpected happens to them. This article breaks down how mortgage payment protection insurance works.

What is Mortgage Payment Protection Insurance?

Mortgage Payment Protection Insurance, or MPPI, is a form of mortgage insurance offered by banks and lenders to protect against the risk of default. The most common type of MPPI is called "loan payee coverage," which means that the lender will cover all or a portion of your missed payments due to unemployment, disability, or death. You can learn more about mortgage payment protection insurance through Foxgrove Associates.

How Mortgage Payment Protection Insurance works

When you put down a large sum of money to buy your home, you need to consider the costs. One of these costs is the mortgage for your home. This can be a hefty price tag that puts some people in a bind. To help with this dilemma, an insurance company named Mortgage Payment Protection offers credit protection that allows borrowers to make extra payments on their mortgage.

When to consider MMPI

Mortgage payment protection insurance providers are very competitive when it comes to pricing. They typically offer different levels of protection, such as guaranteed principal (a lump sum for the mortgage), guaranteed interest, and loan repayment. These protections will guarantee that a borrower’s monthly payments are paid in full one month after the mortgage is due.

With the growing trend towards mortgages, people can find themselves in a tough spot. They'll be left wondering if they need to apply for mortgage payment protection insurance as soon as they purchase a home.