❌ Don't Buy Mortgage Insurance ❌

This video is going to be a super quick one today. There's not a lot of explaining to do. It's just a little piece of advice. And by advice, I mean, this is not financial advice, but I just want to talk a little bit about your mortgage. It's a big deal these days. What's going on with mortgages, the cost of mortgages. There's just one thing I want to get across to you. This is my preference of how I like to do things. You don't have to do it this way. I just think there's a product out there that I would never buy and I want to make you aware of that. So really quick before I begin, if you would like to stay up to date on the Surrey and Fraser Valley marketplace or learn more about Canadian real estate, please subscribe to the channel and make sure you click the like button for little tips like this one. And if you think I'm wrong about this tip, which most people think I'm wrong about a lot of stuff, please just let me know why in the comments. I'd be super interested to see how everybody feels about what I'm about to say. And that particular thing has to do with mortgage insurance. Now I'm not talking about mortgage payment insurance in the respect of CMHC or Sajan. I'm not talking about the bank insuring your loan if you're maybe a high ratio borrower. What I'm talking about is particularly critical illness and life insurance on your mortgage. If you're unaware, this is how it goes down. You sign paperwork with your mortgage broker, maybe you go into the bank, sign those last few documents, and then they try and do the upsell. You can't blame them for that. They're a business. Of course, they want to try and sell whatever they can sell. One of the products that's usually offered to you when you're signing for a mortgage is mortgage insurance for critical illness and death, meaning that if you get sick for any period of time and you can't make your payments, there is an insurance you can buy for that, or if you pass away, you want to make sure the mortgage is paid off, you can buy insurance for that. However, here is the pitfalls and why I'm advising you, you probably don't want that. Is it good to have insurance? Absolutely. I have insurance. I don't have this particular type of insurance. Here's the deal. If you buy mortgage insurance for your property, if it's critical illness insurance, your mortgage will be paid for the portion of time of which you likely cannot work. It's usually how most policies work. So you're buying insurance, but it's not like if something happens to you, for instance, you get cancer, that your mortgage is just paid off. It's just the period of time of where you are sick. And I mean, I know mortgage payments are quite high, but is there, are you really going to be off work for that long? I don't know. And then you could also buy insurance, life insurance. So you pass away, your mortgage gets paid off for the benefit, maybe of your spouse or your kids or somebody like that. But here's the negative to that. As you buy that policy, it is now you're making the same payments, whatever those payments happen to be. I think at one point mine were 30 or $40 a month. I don't have it anymore. I did, I did make this mistake when I was younger. Um, but you have that policy and you're paying into your mortgage. It just usually comes in your mortgage payment, but your mortgage balance is going down over time. So as you continually pay for this mortgage insurance, the actual benefit you get over time only gets smaller and smaller and smaller. And over time, you're probably going to have more and more and more means because your wages go up, uh, whatever the case may be as you get older, maybe you get an inheritance. So there's no point in paying for an insurance policy of which is only getting less beneficial over time. So what's the solution? Well, again, not financial advice, but here's what I've done. It's a much better to go to an actual insurance agency. In my case, I use manual life. And at that point in time, I bought life insurance. You can also buy critical illness insurance, but that's now set at a said dollar amount. So again, let's use these dollar amounts. Let's say I have a $500,000 mortgage on my property and I buy TD's insurance policy. I keep making that payment. Maybe it's 50, $60 a month. I don't know what it is. Even it could be $4 a month. I really don't know. I haven't had it never, but 10 years down the road, I've paid off a hundred thousand, 200,000, whatever it is of that mortgage. So it's getting to be a smaller and smaller benefit. But if I buy that private, uh, for instance, life insurance and I pass away. Now my family might get that 500, that same $500,000 policy. Now they get the full 500 K. So my property, uh, has increased in value. Hopefully we're lucky. The mortgage has gone down to say 300, maybe three 50. And now they actually get not only the mortgage paid off, but they also get the extra chunk of money on top, or they could just take that 500 grand from the life insurance policy and they might only continue to make payments. They might not actually pay off the property at all. So these are things to consider. I really just think it's a bit of a cash grab and I don't think it's a great one. I think there's better insurance policies out there. You should probably talk to, I'm not an insurance salesman. It has nothing, no benefit to me whatsoever. Just a little bit of a tip out there for when you are signing your mortgage. And, uh, for all the big banks out there and everybody selling these products, I'm sorry, I don't think you should be selling those products. That's just me. I guess there's the right product out there for everybody. Just get informed before you actually sign your mortgage, because this is a product that will be kind of jammed down your throat, kind of last second at the closing table, just similar as if you're buying a car and they're trying to add in all the extras and the warranties and all that stuff. This is a very similar kind of thing. So there you go. Rant video for the day. A little different than normal. Let me know what you think of my strategy down below in the comments. Subscribe to the channel and we'll see you in a couple of days.