I am not a financial planner and I am not an insurance agent. But, the one thing I highly recommend is insurance to cover the mortgage debt.
As a lender I have sold insurance. I remember a young man signing his loan papers on a Friday morning at my office. That afternoon around 5 P.M. his wife came in to sign. I can still visualize their three little kids running all around the office in delight. They were between 3 and 6 years old and beautiful. The lady signed the loan papers and I gave her a check for $3500. That was actually a big personal loan mid 1970's.
Early Saturday morning my assistant called me and asked if I had seen the newspaper. I said "no" and she told me that there was a story about a man killed in an automobile accident late Friday afternoon. It was the husband who had signed his loan documents on Friday morning.
On Monday morning the wife came to my office escorted by a friend. She had the check that was made out to her and her husband for $3500; she wanted to return it to me. I felt so bad for her but did get some relief because I told her that the loan had life insurance on her and her husband. I took the check and gave her a new check with her name only. I am sure that the money came in handy. In those days average income was probably around $10,000 a year which would be about $7800 net money, so $3500 was a lot of money that she sorely needed at the time.
There are a lot of new buyers in the market and when I talk to my customers I am aware that so many do not have life insurance at all. For a person who is 35 a $300,000 term policy will only cost $15 or even less each month. Please talk to an insurance agent or even buy online but please protect your loved ones with an insurance policy that covers the mortgage.
Doug Jones
Mortgage Magic NMLS 286668
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