Protecting your family from mortgage debt.
If you're a homeowner, you may have concerns about how to protect your loved ones from mortgage debt—and with good reason. Mortgages make up the lion's share of total debt among U.S. households—at 67 percent. 1 Plus, the average monthly mortgage payment accounts for 15.8 percent of a buyer's income—the highest it's been since 2010.2
So it's no wonder you may be feeling anxious about managing your home loan payments, as well as ensuring your family is protected, should the unexpected happen.
Here are some steps to help shield your loved ones from mortgage debt:
Know your mortgage.
Understand how the terms and conditions of the mortgage will impact your ability to make housing payments in the future. For instance, if you have an adjustable rate mortgage (ARM), you may start with lower payments, but may face sharply higher payments in subsequent years.
You may want to consider refinancing with a fixed-rate mortgage. By adding predictability to your monthly payments, you can help ensure your mortgage will be manageable throughout the life of the loan.
Consider your options.
Although you typically have 120 days before you face foreclosure, don't delay. Reach out to your loan service provider as soon as possible to find out your options. Your provider may be able to offer a “loss mitigation" program so that you won't lose your home. You also may be able to get a loan modification, which can reduce your monthly payments or the interest of the loan. Work with a trusted mortgage banker to see if this is a viable option for you.
In the case of the unexpected, you can use the proceeds from a life insurance policy to help pay for a mortgage.
From buying a home to planning for your children’s future, life is always changing. We can help.