New Home Purchase (Mortgage Question)

[Mustang5ohMan]

So I just purchased a home about 5 months back...

Is their an insurance that covers if one lost their job or were unable to work to ensure the mortgage is able to be paid?

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[lacanteen]

A lot of lenders will defer payments due to Covid job loss. You still owe the payments and accrued interest but it's just loaded onto the loan. It's best not to defer too much especially since your loan is only a few months old and payments are comprised of mostly interest. All you have to do is ask the lender.

There is an insurance product that will make your payments if you become unable to work due to major illness or injury, but have limitations and this can be expensive, especially if adding to an existing loan rather than bundled into the original loan.

 

[Mustang5ohMan]

Yeah I’m looking for the insurance policy. I’m by myself so if something goes down I need to “insure” it gets paid.

 

[lacanteen]

Google "mortgage payment insurance protection" and start learning. If it were me, I'd start with the lender. That would give me something to compare rates and coverages.

 

[ArktidMino]

About a year ago, I snagged my dream home, but like you, I started thinking about what if the unexpected happens. So, after some research, I found out about income protection insurance. It's not specifically for mortgages, but it could be a lifesaver if you ever face job loss or can't work due to illness. I'm not an expert, but it might be worth looking into. I'd also suggest looking into Equity Release Lincoln options, it's worth exploring. It's always good to explore different options. Anyway, hope you find the peace of mind you're looking for!

 

[key01]

Disability insurance. Every young homeowner should have this along with a healthy TERM life insurance policy to cover all of the essential expenses needed, while leaving money to your family to help with their loss. Neither of these are expensive when you are young. I always carried $2M in term until a few years ago that dropped to $500K when I hung up my sport coat.

 

[coz0502]

Some good advice already, I'll add another thing to consider. Start building a emergency fund. I've been laid off 2 times over the last 15 years or so. Having a savings account saved me 1 of those times as it was 6 months before I found a new job. Which oddly enough, is the amount of money at minimum I have in my savings at all time. Keep in mind, you don't need 6 months of paychecks, you need 6 months of the bare minimum expenses. Things like mortgage, car payments, electric, water. When I was unemployed my leisure spending was basically $0.

Now I realize everyone's financial position is different, so if money is tight, start small.
I've found the best way to do this is to immediately move $xxx into my savings account every payday. Once it's moved from checking to saving it's no longer spendable unless for an emergency. This is my cash on hand emergency money, the last thing you want to do is borrow against long term savings money, think things like 401ks, IRAs, Annuities.

 

[Balr14]

Some good advice already, I'll add another thing to consider. Start building a emergency fund. I've been laid off 2 times over the last 15 years or so. Having a savings account saved me 1 of those times as it was 6 months before I found a new job. Which oddly enough, is the amount of money at minimum I have in my savings at all time. Keep in mind, you don't need 6 months of paychecks, you need 6 months of the bare minimum expenses. Things like mortgage, car payments, electric, water. When I was unemployed my leisure spending was basically $0.

Now I realize everyone's financial position is different, so if money is tight, start small.
I've found the best way to do this is to immediately move $xxx into my savings account every payday. Once it's moved from checking to saving it's no longer spendable unless for an emergency. This is my cash on hand emergency money, the last thing you want to do is borrow against long term savings money, think things like 401ks, IRAs, Annuities.

That is wonderful advise. I was a mainframe IT consultant for more than 40 years, which is very much a feast or famine position. After some financial scares back then, I got into the habit of putting money into a separate account first, every time I got paid. That evolved over a few years into carrying no credit card balances, then into saving to buy any major purchases. Ultimately, we pay cash for everything (cars, house, etc.). We have bank accounts for major non-essential purchases (cars, vacations, home improvements, hobbies, etc.) and that is all we can spend. It takes a lot of discipline, but it's worth it.

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