Americans owed $8.8 trillion in mortgage debt in 2018. However, according to experts, the mortgaged debt has been declining since 2013 which has helped recover the housing market after a constant decline of five years.
Unless you’ve inherited family money, chances are, you’re purchasing a house on mortgage. Are you sure you’re not paying more than you’re supposed to?
More often than not, the insured ends up making a few mistakes in their mortgage contract and mortgage life insurance policy which results in higher premiums and deductibles.
To avoid deductibles that you may not be able to afford, following are some mistakes you can avoid:
Committing Too Much On the House
It makes sense that you’d want to pay off your mortgage debt as soon as possible. But tying too much of your money in paying off your mortgage loans will leave you with lower income for other household, familial or healthcare expenses.
Your mortgage should not exceed 28% of your pretax income. So if you’re earning $100,000 per year, your mortgage per month shouldn’t be over $2,300.
Ignoring Home Maintenance Costs
Now that you’re a homeowner, you will come across regular home maintenance costs. If the cost of your home was $200,000, you can expect the maintenance expenses to be around 1% to 2% of that.
These might not include luxurious purchases, but it will involve purchases like the maintenance of your roof or buying a water heater.
Selecting the First Mortgage Loan Deal You Come Across
Talking to several mortgage lenders is as important as talking to several vendors for your wedding arrangements.
Every mortgage lender has differences in fees and interests on the loan they provide. Shopping for the best, cheapest and most flexible deal will help you save thousands of dollars each year.
Not Understanding Mortgage Insurance
In the event that you fail to make your monthly payments, mortgage insurance kicks in, covering the lender’s loss. That way, you or your loved ones don’t lose the house.
Here at IFG Insurance Services, we provide free quotes for clients who are confused about insurance. If you’re looking for Mortgage Life Insurance FL or Term Life Insurance FL in Florida, get in touch with us today!