Mortgage insurance
During the processing of mortgage loan the mortgage insurance is obligatory. The period in which mortgage insurance is arranged, should be equal to the period for which the credit is issued under the mortgage. According to the law, the borrower must arrange insurance for a particular subject only from damage, as well as from the absolute destruction. But this is not the only points of the insurance, in the case of banks, as the latter requires the borrower an additional insurance of their lives, disability and title (the risk of loss of ownership of housing).
When it comes to mortgage insurance for housing, the bank requires the borrower the amount of insurance, loans exceeding 10%. If the first year the amount has not been settled, the next year, the borrower will pay 110% of the outstanding amount. And so it will continue until the borrower fails to repay the bank the entire amount of the loan. Despite this, there are many borrowers who prefer to have insurance purchased for housing all of its value. So, if there is an insurance case, a company which is entrusted by the insurance obligation will be repaid on a mortgage loan at the bank instead of the borrower. After that, the insurance company will return the balance of the borrower in the amount specified in the insurance document.
Not all banks are willing to credit the insurance policy to the insurer, which is not a partner bank. Therefore, if the borrower is tied to a company in which he has insured his work and life, and does not want to change it, he should find exactly one bank that will agree to work with the insurer.
Among the banks that deal with mortgages, some of them require insuring the risk of loss of ownership of housing for the full period of the loan, the remaining banks are satisfied with a term of 3 years (this is a limitation of action for the invalidity of treaties). If you purchased an apartment in a new building, title insurance is optional.
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