Do I Need To Buy Mortgage Life Insurance?

Mortgage life insurance is a policy that pays off your mortgage at the time of your death. This is not to be confused with private mortgage insurance (PMI) which only benefits the lender in the event you are unable to pay your mortgage.

The beneficiary on a mortgage life insurance policy is the lender. The money goes directly to them.

You might be okay with that, but in a lot of circumstances, it makes more sense to have a traditional life insurance policy and for the money to go to your dependents, allowing them to decide whether or not to pay off the mortgage, continue making mortgage payments, or to sell the house. They may have more urgent needs than just paying off the home.

When you shop for mortgage life insurance rates, you will find that term life insurance is usually more competitively priced. Term life insurance will also allow you to name your children and/or spouse as beneficiaries rather than the mortgage lender.

Another disadvantage to mortgage life insurance to consider is that the policy stays with the house. That is, if you decide to move, the policy is not transferable to your new home. You would have to requalify for a new policy. You are now a few years older, so likely will pay more for the new policy.

So should anyone buy mortgage life insurance? In some cases, yes. If you are obese, smoke, have high blood pressure, have diabetes, or have other health issues that keep you from getting the best rates on traditional life insurance, or even maybe keep you from getting life insurance at all, mortgage life insurance might be your only option. These policies typically have much less stringent health requirements for qualification.

Generally speaking, buying any kind of life insurance that has one purpose is usually not a good idea. Most of the time you are far better off sitting down with a financial advisor. They can help you to determine the needs your family would have in the event of your demise, and help you to purchase the appropriate amount of coverage to meet those needs.

Do I Need To Buy Mortgage Life Insurance?

Mortgage life insurance is a policy that pays off your mortgage at the time of your death. This is not to be confused with private mortgage insurance (PMI) which only benefits the lender in the event you are unable to pay your mortgage.

The beneficiary on a mortgage life insurance policy is the lender. The money goes directly to them.

You might be okay with that, but in a lot of circumstances, it makes more sense to have a traditional life insurance policy and for the money to go to your dependents, allowing them to decide whether or not to pay off the mortgage, continue making mortgage payments, or to sell the house. They may have more urgent needs than just paying off the home.

Term life insurance is usually more competitively priced and will allow you to name your children and/or spouse as beneficiaries rather than the mortgage lender.

Another disadvantage to mortgage life insurance to consider is that the policy stays with the house. That is, if you decide to move, the policy is not transferable to your new home. You would have to requalify for a new policy. You are now a few years older, so likely will pay more for the new policy.

So should anyone buy mortgage life insurance? In some cases, yes. If you are obese, smoke, have high blood pressure, have diabetes, or have other health issues that keep you from getting the best rates on traditional life insurance, or even maybe keep you from getting life insurance at all, mortgage life insurance might be your only option. These policies typically have much less stringent health requirements for qualification.

Generally speaking, buying any kind of life insurance that has one purpose is usually not a good idea. Most of the time you are far better off sitting down with a financial advisor. They can help you to determine the needs your family would have in the event of your demise, and help you to purchase the appropriate amount of coverage to meet those needs.

How Can I Correct Negative Credit Reporting From Fraud?

From the Mint.com blog.
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How to Correct Negative Credit Reporting From Fraud :: Mint.com/blog

“John, I’ve been watching with interest the stories about Target’s data breach and how the information compromised has evolved from payment information to now include personal information. If someone uses my personal information, opens a new account in my name, and never makes payments how can I get that off my credit reports?”

This is a great question and very timely considering some fraudster is running around with payment and/or personal information belonging to at least 70,000,000 Target customers.

Thankfully the Fair Credit Reporting Act (hereafter “FCRA”) provides VERY aggressive consumer protections regarding identity theft protection and fraud.  And, every state has additional protections that

Federal Law

The FCRA has an entire section that addresses fraud and identity theft.  You have the right to the following at no cost:

One-call Fraud Alerts: You can place a fraud alert on your credit reports that will remain for 90 days.

You only have to contact one of the credit bureaus to place the alert and they have to “refer” the information to the other credit reporting agencies.

A fraud alert asks new creditors to verify that you are, in fact, the person applying for credit in your name and makes it illegal for them to extend credit in your name without your authorization.

Extended Fraud Alerts: You can extend the 90-day fraud alert to remain for 7 years. You’ll have to submit something called an “identity theft report” to the credit bureaus.

An identity theft report is any fraud affidavit or police report filed with a law enforcement agency.

This helps to separate the real victims of fraud from those who are crying fraud to get legitimate information removed from a credit report, as filing a false police report is a crime.

Placing the extended alert is another “one-call” action, as the credit bureau receiving your request has to share it with the others.

Correcting Credit Reports Containing Fraudulent Data: Despite the protections afforded under the FCRA, we all know that true name fraud happens.

And, it can result in derogatory account and collection information appearing on your credit reports.

That’s bad news because now it’s likely harming your credit scores and you’re receiving calls and letters from collection agencies.

If you have information on your credit reports that has been caused by fraud it’s not the end of the world because you have some fantastic protections under the FCRA.

Once you notify the credit bureaus that you have information on your reports caused by identify theft they have to block it from your credit reports, within 4 business days.

That’s 26 days sooner than they have to complete garden-variety credit disputes.

You’ve got to provide them with some paperwork, including the same type of identity theft report I explained above, but once it’s blocked, it’s gone.  Done and done!

State Law

Every state in the country has a law that allows victims of fraud to place a security freeze on their credit reports for free.

A security freeze (also called a “credit freeze”) prevents any new credit from being issued in your name.

The freeze essentially takes your credit reports out of circulation and no new lender can get access to it, or your credit scores.

And, no access to credit reports/scores means no underwriting of any type of loan.

Be aware, however, that while a security freeze locks any new lenders out of your credit reports and prevents true name credit fraud, it can also delay legitimate credit applications that you’ve submitted.

You’ll have to proactively “thaw” your credit reports and put them back into circulation prior to submitting credit applications or you too will not be able to open an account in your name.

In my mind this is little reason to not freeze your credit reports especially if you have already been a victim of credit fraud.

Experian has a very good explanation of security freezes, the pros and cons, and the process of placing a freeze all on their website here.

A final note, which is actually more of a warning…if you’ve read this and think you can use these procedures to have negative but accurate information removed from your credit reports under the guise of it being fraudulent, I’d suggest you think twice as you’d be committing fraud and might find yourself on the wrong side of a Federal indictment.

I’ve served as an expert witness in more than one of these cases.

John Ulzheimer is the Credit Expert at CreditSesame.com, and a credit blogger at SmartCredit.com, Mint.com, and the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry. The opinions expressed in his articles are his and not of Mint.com or Intuit. You can follow John on Twitter here.

Do not delay retirement planning

Many people have been putting off planning for retirement, but that can really have some serious consequences later on life. While many have dreams of retiring to Florida or playing golf every day, this is a dream that is going to be hard to pull off for those who haven’t started saving early on. Those who are trying to catch up later may find that they have really fallen behind because of the compounding rate of return.

Those who delay getting ready for retirement are taking some huge risks for their future. They may find that they are not able to stop working, and that they are living without enough money to make ends meet. Those who are not prepared may end up having to move back in with their children or even end up living in poverty. This is not something that anybody wants to have to deal with, so get started planning early.

Over time money that is saved early in life will start to earn interest that will really add up over time. Even just putting away one thousand dollars will accumulate a lot of money over time. Those who waste any time getting started won’t be able to earn as much in interest, and that can really set people in reaching their retirement saving goals. Also, it is important to remember to consider inflation when saving for retirement. Factor this in when considering how much is going to need to be saved.

To get an idea of how serious it is going to be to start saving, begin to calculate exactly what is going to be needed. Consider how much it is going to cost to live each year with inflation included. Decide if considering to work at a part time job is going to be an option, and calculate how much is going to need to be saved each year in order to make this retirement dream come true. Many have found that the amount that this is going to cost is going to be a lot, and that they really need to start saving as soon as they can. Those who don’t get started are going to have problems with their compound rate of return, and they won’t make as much as they could have otherwise.

Welcome to the MIE blog

Hello and welcome to the Money Is Everywhere (MIE for short) blog. Our goal at MIE is to help people to educate themselves and better understand topics surrounding money and personal finance.

We believe that with a financially more educated consumer base, future economic catastrophes like the mortgage crisis of 2008. Many people point the blame at loose government regulations as well as the greed of large financial institutions for what happened. They certainly played a role. One could also make the argument that if people had a better understanding of their own personal finances and how credit works, far fewer people would have been signing up for those mortgages that they clearly could not afford, whether they were approved or not.

We as consumers need to take some of the blame. We need to take the responsibility on ourselves to get a better grasp on our own personal finances.

We hope to assist in that pursuit with discussions around credit, insurance, daily money management, and more.

Thank you again for visiting, and we sincerely hope you find value in the website.