How to Save Money on Mortgage Payment Insurance: Making MPPI Savings by Establishing the Homeowner’s Risk Factor

Although mortgage payment protection insurance, or MPPI, is not required by law, peace of mind that missed mortgage payments due to accident, sickness or unemployment cause many to automatically obtain this coverage. Because of this, mortgage payment protection is easy to sell and sadly leads to homeowners being overcharged or even being lumbered with a policy with insufficient or superfluous cover.

Getting Cheap Mortgage Payment Protection by Calculating Risk

The key is finding out if vital coverage is in place and to dispense with needless coverage. Risk factor can be calculated by the following:

  • The size of the mortgage in relation to the household income
  • Whether the place of employment has sick coverage and how much
  • The size of the redundancy package
  • What state benefits are available if the financial situation changed
  • Whether the customer is self-employed

The customer may consider making a claim if mortgage protection has been missold.

A BBC News report “Crackdown on Misselling of PPI” describes how the Financial Ombudsman has been inundated with numerous complaints after borrowers had been missold payment protection on personal loans that had useless or superfluous coverage. By checking the small print, the customer may establish the usefulness of the coverage.

How Much Mortgage Insurance Coverage is Necessary?

The MPPI is often designed to cover mortgage payments for up to a year. This equates to twelve times the mortgage repayments. Sufficient savings could provide an alternative way of covering for this period particularly if the mortgage payments are small in proportion to the household income during employment. The homeowner may save thousands of pounds worth of premium payments that may go on for years without a claim.
Redundancy Insurance Coverage

The question of how much mortgage protection the homeowner needs could be answered when checking out what state benefits are available.

Long-term employment at the same place often pays out large sums for redundancy. In this case, the homeowner may beg the question of whether mortgage protection is really necessary for redundancy. The Department for Innovation and Business Skills has an online calculator that helps the homeowner work out how much statutory redundancy entitlement would be due if redundancy occurred.

Loan Protection Versus State Benefits

In some cases, a mortgage protection insurance payout could affect the homeowner’s entitlement to certain benefits. It is advisable to check how such a payout would affect income support and to work out whether paying for such a payout is worth it. Continuing to sign on even when monetary benefits are not forthcoming, means that national insurance contributions will continue to be paid into the state pension.

Is Critical Illness Coverage Necessary?

Checking out what the company of employment would pay out in the event of injury or sickness could make this coverage on house insurance unnecessary. The self-employed must take extra care however, to ensure that adequate coverage is in place and to seek proper financial advice.

Is Mortgage Coverage Necessary?

The customer may question the necessity of whether payment protection on a mortgage is really necessary when calculating the risk factor. A place of employment, which offers a good redundancy package and sufficient sick benefits could make this unnecessary. Furthermore, if the household income is large in proportion to the mortgage payments, the risk factor may be sufficiently low to dispense with it altogether.

Paying Off Your Loans Is Easier Than You Think

Paying off student loans are a real concern for many people out there. Many people accumulate massive amounts of debt just to obtain a bachelors degree. Unless you went to some Ivy league school or have a degree that is high demand, you more than likely are not making over 40k.

Establishing a budget is the key to really making this happen. First create a journal, write down and track everything that you spend. If you have and Iphone there are tons of good apps to help you budget. I had to figure out how much money I was taking home, after taxes, Insurance, 401k, etc. I figured out that it wasn’t much money. Next, I had to really establish what I was spending my money on. Of course everyone will have their necessary living expenses like gas and electric. Many people will also have unnecessary expenses like premium cable packages, smart phones with data plans, simply things you can live without. Sure, there are luxuries in life that make life better, but that is for you to determine for yourself. Figuring out what you can live without is the key. I did not need a cable plan that had every movie channel and HD. I saved $50 on this alone. When I was at work I was on a computer and when I got home I had 3 computers that I could use. Did I really need a data plan for my 30 min commute? Well I saved $25 without the data plan. So what else was I spending my money on? I spent about $200 on clothes and another $400 on going out. I did not realize this until I kept a disciplined journal of what I was spending. In realty your not going to cut out everything, but you know there are some areas where you can realistically save. After really figuring out where my money was going I was able to apply an additional $200 dollars toward my student loans.

The best way to avoid having this kind of debt is to be preemptive. Working at a major bank I had so many kids coming to me trying to get private loans to pay tuition. Many of them where only in their second year of school. They really made bad decisions in choosing their schools. First figure out can you really afford to go to the school that you want. In many cases it makes sense to go to the local community college for the first few years and really decide what you want to do. Maybe you should stay in state and not go out of state where you will pay much more. I Know going to college can be one of the most exciting thing things in a young persons life, but figure out what you can really afford.

Government Loans for Women Start Up Businesses

The United States government and state agencies do not provide grants for women- owned businesses; however, some states do offer loan programs for women who either wish to establish their own businesses or want to grow their businesses. The loans are intended to support small businesses to develop and to flourish. Some of the lending plans require an application, a processing or a loan fee.

California: Women’s Economic Ventures Small Business Loan Fund

The loan is available for men, women and minorities. The program lends $1,000 to $25,000 to start-up businesses and $5,000 to $50,000 to expanding businesses. Applicants must: hold U.S. citizenship or permanent residency, reside in Santa Barbara or Ventura County, and demonstrate business experience or complete the organization’s self-training business. The application fee is either $35 or $50, and the loan fee of 2% is required at the time of closing.

Women’s Economic Ventures

333 S. Salinas Street

Santa Barbara, CA 93103

805-965-6073

wevonline.org

Illinois: Minority, Women and Disabled Participation Loan Program

The loan is eligible for women, minority or disabled-owned businesses operating in Illinois. It is targeted for small business with fewer than 500 employees, and the loan may amount to $50,000 or 50% of the total cost to run the company. The lending amount can be used for creating capital, purchasing equipment and renovating office premises.

Illinois Department of Commerce & Economic Opportunity

620 E. Adams

Springfield, IL, 62701

217-782-3891

commerce.state.il.us

Massachusetts BDC Capital Community Loans

The program lends money to women-owned, minority-owned, and non-profit companies that are located in the New England area. The loan terms are for the following: business development, equipment purchases, real estate acquirements or construction, debt refinancing, and mergers and acquisitions.

BDC Capital

500 Edgewater Drive

Wakefield, MA 01880

781-928-1100


New Jersey: Urban Plus

The Urban Plus program provides financing up to $3 million for New Jersey-based businesses: Atlantic City, Camden, East Orange, Elizabeth, Jersey City, Newark, New Brunswick and Paterson. Women and minority-owned businesses with fixed-asset collateral are encouraged to apply.

New Jersey Economic Development

36 West State Street

Trenton, NJ 08625

609-292-1800

njeda.com


New York: Micro loans for Minority and Women Owned Business

The Community Development Financial Institutions lend financial support to either women-owned or minority-owned businesses that often do not qualify for traditional bank loans. They also advise or suggest business development plans and target companies located in the state of New York: New York City, Long Island, Westchester, Albany, Belmont, Dunkirk, Ithaca, Saranac and Syracuse.

Empire State Development

Divison of Minority and Women’s Business Development

633 Third Avenue

New York, NY 10017-6706

212-803-2414