QUOTE(GroovyChick @ Dec 15 2011, 03:22 PM)
Yea, Sharon or anyone in the forum, care to share how long I should take the MRTA for.
Im taking loan for 30 years, initially took 30 years MRTA (joint so 50% each)
Do you think I can lessen this up as Im a little confused on the MRTA.
What is the good amount of years to take the MRTA for?
mrta is shorter period but u cannot get ur money back at all. and if u refinance with other bank, u have buy mrta all over again as the previous bank's mrta only covers for that particular bank. so u may end up paying more if u think of refinancing later w other banks.
mlta u can continue like usual even though u switch banks. it's not affected. if u buy 2nd house later, u can still use the same mlta (can just top up if the loan is larger for 2nd house). so in the long term, this is better...especially for investors who plan to buy-sell houses.
mlta...is more flexible but more expensive n long term: similarly pay monthly instalment like mrta but the good thing is, u can get back some cash towards the end besides providing coverage for total permanent disability and 36 critical illness (mlta pays u lump sum and can also automatically still pay for ur insurance premium till age 70 if these happens). just think, if disease were to strike, who will finance for the loan? mrta does not cover this.
mrta is insurance money which u pay is tied to the bank. so if death occurs, the mrta u purchase: the lump sum is paid to the bank (not you). but u/ ur family member gets the house. mrta only works if u r tied up to that bank.
if u plan to sell off this house later and buy a new one, u can still use back the same mlta u purchased earlier (it doesn't burn off)...and after 17 - 20 yrs, there is still cash value u can take out to pay off the loan if u wish to.
it also protects u more than mrta (it covers death, total permanent disability and 36 critical illness - like cancer, heart disease, stroke, etc).
mrta only covers death and sometimes total permanent disability and not critical illness. it can also provide yearly loss of income due to disability, and prudential will automatically pay ur monthly premium for u up to 70, if these things occur to u up to age 70, besides the lump sum they r giving u.
prudential has a plan whereby it is flexible for u to increase or decrease the amount of coverage needed later on also.
if interested pm me and i will work out the policy for u based on ur financial needs n status.
This post has been edited by sharont_ll: Dec 15 2011, 05:08 PM