Mscntamn July 14, 2016 12:01 28 Comments Want to meet with a mortgage consultant who has been tested and approved by a mortgage? See http://the-fifth-hope.net for the scoop
In the last few years we have been talking about mortgage recycling here, but now that the interest rates have started to rise, it is far less interesting and much harder to refinance a mortgage because the conditions they offer will probably be unattractive and the recycling will not be worthwhile (of course there are still cases where refinancing is worthwhile) Talks about the absolute majority).
You have to remember that apart from our mortgage, every month we pay a few tens of shekels (and sometimes hundreds) for life insurance and property insurance, and here there was no change, so there is a reason to check whether the insurance should be recycled.
So what is mortgage insurance recycling? Is it worthwhile? And how do you do it? All this in the next post.
What is a mortgage insurance cycle?
The truth is that there is no such concept and I think I pretty much invented it in this post …
Basically it is a reexamination of our insurance to see if there is a situation to lower costs and pay less on the life insurance and property insurance we did for our mortgage (the truth is to do it for all of our insurance regardless of mortgage, but this is a separate post).
When we made a mortgage, we did with her life insurance and property insurance, the demand for insurance comes from the bank to insure cases of death, God forbid, or earthquake or damage to the property.
Some of us did a market survey and chose the cheapest option and some of us did the insurance at the bank or in the first place through which he received an offer.
Whether we have done insurance after a survey or done without a survey, you should now check costs again and see if there is a situation to lower your monthly refund.
This is where you will find it easier to lower costs, and here, too, insurance amounts are very high and there is much more “meat” to cut and pay less.
Why can I lower my life insurance costs?
Basically, it’s a little illogical that if we took out a mortgage three years ago when we were 35, we would get a cheaper offer today when we are 38 years old (it is known that the older we are, the higher the insurance premium).
So what’s the catch here?
I will tell you briefly how the world of insurance works.
Most insurance companies provide impressive discounts for the first years of the policy, sometimes a discount that reaches 70-60 percent of the insurance premium for the first years, and then the price returns to normal.
If I was supposed to pay a premium of NIS 100 a month and the insurance company gave me a 60% discount for the first 3 years, I would pay only NIS 40 per month in those years and after 3 years the price would return to NIS 100 More that “matured” since then).
The idea is that I can accept this assumption again only if I move to another insurance company (or at the same time I will stay in the same company that will agree to give me another discount).
Did you understand that?
If I am offered such large discounts only for the first few years of insurance, then it is certainly worth checking every few years to check the new costs and get the same discounts I can get in the first few years.
Another small thing about life insurance
Your insurance amounts should be updated according to the balance of your mortgage, but in recent years you have returned money to a mortgage and you have not updated any of the insurance. In this case, you are currently paying a higher premium because you are covered for a higher amount unnecessarily About 800 thousand and after a year they returned 100 thousand to the bank but you forgot to update the insurance – that means you are insured for 800 thousand when you should have insured only about 700 thousand).
When you do a new survey you can go over it and update the insurance amount as it should be. By the way, I have no problem that you will be insured for more than what you owe to the bank (and in case of death the remaining money will pass to your beneficiaries), but you should know that you are paying for it and that is all right with you.
Here there is not much meat to save on ownership, because the price of property insurance is fairly constant over the years (and usually is much lower than life insurance).
Here, too, there are discounts for the first years that must have ended over time, and here, too, it is worthwhile to do a new survey and see if there is a possibility to lower the price.
Here too there is no matter of age and the price of property insurance has remained the same over the years (except for the discounts that end, so surely if it was resting it is worthwhile to get rebate).
However, there are a number of things that can be improved in property insurance in such an examination – the amount of third party coverage (if present in the current insurance), pipe damage coverage, and the sum of the insurance itself.
What should you be careful about when you want to refinance mortgage insurance?
At the same time, I also want to say what to watch out for and not to do ourselves harm:
- Health Declaration
We must tell the whole truth (and only the truth) about our health.
It is very tempting to say that we do not smoke because the price will drop by NIS 50 per month, but it is forbidden to do this because if and when the death event happens, we will simply not be covered and those who get hurt will be our spouses and children.
- Change in health
If we have life insurance and declare at the time that everything is OK and we are healthy in all, and if our health has changed over the last few years, we should be more cautious with the new cycle and must update about the change we underwent. And that’s fine, but the innovation must contain the changes we’ve undergone and it’s a duty to report it and see the price after the change.)
- Future payment schedule
I want each of you to keep an insurance payment schedule for the next few years (until the end of the mortgage) so that you can see how the premium develops (where you can see what happens to the price when the new discounts are over) – The payment schedule is very important The end of the mortgage period and when we can save.
Where do you start and how do you evaluate the feasibility of saving?
I suggest to each of you that you have life and property insurance to reexamine the price (whether in the existing company or in a new company), and most of you will be surprised to find that you can download dozens of shekels from the monthly price, which amounts to thousands of shekels in the end Do this survey).
If you would like to be examined for your benefit, I will tell you that I have found for you an old and reliable insurance agency in the field of mortgage insurance that will be happy to check for the possibility of lowering the mortgage insurance. All you have to do is leave the details on the following form. And without cost):