Understanding Underwriting Guidelines

Understanding all of the different underwriting guidelines and niches of the numerous mortgage insurance companies is imperative in determining which company will give you the best possible health class and the most accurate and the lowest possible Mortgage Insurance Cost. Some companies offer a much more favorable health class and Mortgage Insurance Cost to applicants who smoke cigarettes, but they put limits on their overall consumption of nicotine/tobacco. Other companies charge a flat extra fee if you smoke, even if you only smoke one cigarette per year. In the same way, your overall health history, family history, and medications play a vital role in your health class and your Mortgage Insurance Cost.

Depending on your overall health history, family history, and medications, you may be placed in a higher health class with one company than you would be with another, which in turn, will equal a much higher Mortgage Insurance Cost. It’s unrealistic for you to try to understand the numerous underwriting guidelines and niches of every single company in the entire country. That’s why TermAdvantage does the shopping for you. By simply answering five questions, we can determine which company will give you the best possible health class and the lowest possible Mortgage Insurance Cost by comparing all of the different underwriting guidelines and niches from over 2,000 companies.

Motor Vehicle Reports

During the underwriting process, the underwriter will look at a copy of your Motor Vehicle Report (MVR). The information contained in your MVR gives an indication of your behavioral risk to all of the mortgage insurance companies. If your MVR shows a history of traffic violations and speeding tickets, it could increase your Mortgage Insurance Cost.

Your Mortgage Insurance Cost is centered around the amount of risk you pose to the mortgage insurance company. A history of dangerous driving—even if it hasn’t resulted in any accidents or injuries—is a red flag to all of the mortgage insurance companies. A MVR that is filled with speeding tickets, stop signs that went unobserved, and reckless driving (all of which are dangerous and could lead to an accident) will compel the underwriters to increase your Mortgage Insurance Cost. Keeping your driving habits within the confines of the law can go far in keeping your Mortgage Insurance Cost affordable.

Guaranteed Insurability Rider

Once you’ve found an affordable policy that meets your needs and budget, you never want to lose the security and affordability it offers. That’s why adding a guaranteed insurability rider is a good idea. A guaranteed insurability rider can keep your Mortgage Insurance Cost low even if you add an additional death benefit to your policy.

With a guaranteed insurability rider, you can add an additional death benefit to your policy at certain periods of time, and you're guaranteed to be insurable. So, no matter what health changes you may have encountered, you're guaranteed to be approved for the added death benefit. This rider includes an additional charge to your Mortgage Insurance Cost, but it comes in handy if you take out an equity loan, buy a new car, or add another member to your family. It offers the perfect way to compensate for your future needs while preserving your current Mortgage Insurance Cost.

The Significance of Your Family's Health History

Many chronic illnesses, mental disorders, and diseases can be passed on through families from one generation to the next. This means that your immediate family’s health history can play a vital role in your Mortgage Insurance Cost.

When you compare Mortgage Insurance Costs, you'll be asked a question about the health history of your parents and siblings. The underwriters will want to know if any of your parents and/or siblings passed away before the age of 60 years old. If your answer is "yes," then they'll want to know the cause of death.

If the cause of death was the result of an accident, then it won't be an impediment in obtaining you the lowest risk health classification and Mortgage Insurance Cost. If the cause of death was a genetic disease, cancer, heart complication, or psychological disorder, you may find yourself placed in a higher risk health classification, and in turn, given a much higher Mortgage Insurance Cost.

By understanding all of the different underwriting niches of the numerous companies we represent, TermAdvantage guarantees the best possible health classification, which in turn, will equal the most accurate and lowest possible Mortgage Insurance Cost.

The Problem of Underinsuring

Not purchasing enough mortgage insurance to lower your Mortgage Insurance Cost can be a significant problem for your beneficiary(ies). While this strategy reduces the Mortgage Insurance Cost that you must pay into your policy while you're still living, not purchasing enough mortgage insurance can hinder your family’s ability to afford necessities in the unexpected event of your death.

By not purchasing enough mortgage insurance, you compromise your beneficiary's(ies’) ability to pay for your funeral/burial expenses, to pay off your debts, and to replace your income in order to maintain their standard of living. It can be difficult to anticipate how your family’s finances will look in the future, and it can be almost impossible to choose a death benefit that is exactly what your beneficiary(ies) will need, while at the same time keeping down your Mortgage Insurance Cost. There's a fine line between under-insuring and over-insuring yourself, so make sure to take all aspects of your family's everyday expenses and current lifestyle into consideration before paying your Mortgage Insurance Cost.