Interesting article on MSNBC about another question worrying some of my clients - can my mortgage holder go belly up and cause trouble with my mortgage payment?
The short answer is that the terms of your loan are legally fixed, and cannot change, no matter who takes over your lender/their assets. The deeper answer is that if this does happen to you, make sure you keep a close eye on your account to make sure payments are applied properly, your taxes are paid, etc. It's a paperwork nightmare for them, and could trickle down to you.
I have one client, Joanne, who's mortgage was sold to another company BEFORE she even made her first payment on her new home in February. And it's been sold again, since then due the mortgage holder's financial troubles. Joanne's sharp, and will stay on top of this, but it CAN be a part time job!
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People getting a mortgage should consider term life insurance instead of the coverage offered by the lender. A term life policy can be purchased in the amount of the mortgage, and will NEVER decrease in value. Bank mortgage insurance however, usually only covers the amount owing, NOT the original value. Term life insurance can also be cheaper. Consult with your life insurance broker about your options!
ReplyDeletePeople getting a mortgage should consider term life insurance instead of the coverage offered by the lender. A term life policy can be purchased in the amount of the mortgage, and will NEVER decrease in value. Bank mortgage insurance however, usually only covers the amount owing, NOT the original value. Term life insurance can also be cheaper. Consult with your life insurance broker about your options!
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