LUKE_L:
There is one thing to mention about this. Suppose you get a 15 year mortgage but forget to get an “umbrella” insurance policy which is seperate from your normal homeowners/auto insurance. You pay off the house. Some idiot gets hurt either through their neglegance or yours and has a team of layers come after you…but your insurance company (without an umbrella policy) will only cover $100,000 in damages. So the idiots insurance gets the case settled for $300,000. Remember all those personal injury commercial you see? Now you are the one being sued. Your insurance wipes their ass with $100,000 check because that is all your dumbass signed up for and hands it over. Now it is up to your to cover the rest. Supposed that nice new house is paid off but your car is not. Guess what gets liquidated first? Now you are out of a house, your wages are garnished, and you suck because you can’t pay for your car and the Bank repossesses it.
Now supposed you don’t have the house paid off but you have an “umbrella” policy that covers you up to $1.5 Mil. For pennies on the dollar you can get a policy. Literally $10-$50 bucks a month will cover you. Now when the idiots lawyers come to sue you the lawyers of your $1.5 Mil policy will fight to get it thrown out or end up covering a lot more of the damages. Plus, if you house is NOT paid off there is NO WAY they can take it because it has a lein on it.
You could combine the two but why waste all your money upfront? Here Mr. Bank take my $100K now and then tomorrow a tree rips through the roof and now you just bought a broken house. Unlikely, but possible. WHy invest so much up front. To me, that does not make sense. If it does not make sense you must acquit.
Moral of the story…get the longest mortgage policy at the lowest rate, make minimum payments, get as much protection as you can, and live a worry-free life. As far as saving $50K-$100K on interest…you have a guarantee of NOT losing you house if the bank owns it as long as you pay the minimum each month. This may only be worth it if you plan on being around for 5-10 years and maybe more.\
Just something to consider to all you “Pay it off now” junkies. A paid off house is a big target if you are not protected.
Seriously?
You ever hear of a lean being put against your house for bad debt? The same would apply in the situation if someone sued you. They can put a lien on your house for whatever they want and get whatever is left over if you sell it and the bank takes their share.
If you are that worried, then get a 5 million dollar umbrella policy and you’ll be covered. Chances are someone will not be able to sue you for more than medical expenses and lost work if they hurt themselves at your house. No way in hell would they get more than a million dollars unless you were grossly negligent in not fixing something that caused the accident.
I’m not sure if you signed into a 30 year mortgage and are looking for any excuse to make yourself feel better or what, but the bottom line is you will end up paying $60,000 + more than someone on a 15 year mortgage.
LUKE_L:
There is one thing to mention about this. Suppose you get a 15 year mortgage but forget to get an “umbrella” insurance policy which is seperate from your normal homeowners/auto insurance. You pay off the house. Some idiot gets hurt either through their neglegance or yours and has a team of layers come after you…but your insurance company (without an umbrella policy) will only cover $100,000 in damages. So the idiots insurance gets the case settled for $300,000. Remember all those personal injury commercial you see? Now you are the one being sued. Your insurance wipes their ass with $100,000 check because that is all your dumbass signed up for and hands it over. Now it is up to your to cover the rest. Supposed that nice new house is paid off but your car is not. Guess what gets liquidated first? Now you are out of a house, your wages are garnished, and you suck because you can’t pay for your car and the Bank repossesses it.
Now supposed you don’t have the house paid off but you have an “umbrella” policy that covers you up to $1.5 Mil. For pennies on the dollar you can get a policy. Literally $10-$50 bucks a month will cover you. Now when the idiots lawyers come to sue you the lawyers of your $1.5 Mil policy will fight to get it thrown out or end up covering a lot more of the damages. Plus, if you house is NOT paid off there is NO WAY they can take it because it has a lein on it.
You could combine the two but why waste all your money upfront? Here Mr. Bank take my $100K now and then tomorrow a tree rips through the roof and now you just bought a broken house. Unlikely, but possible. WHy invest so much up front. To me, that does not make sense. If it does not make sense you must acquit.
Moral of the story…get the longest mortgage policy at the lowest rate, make minimum payments, get as much protection as you can, and live a worry-free life. As far as saving $50K-$100K on interest…you have a guarantee of NOT losing you house if the bank owns it as long as you pay the minimum each month. This may only be worth it if you plan on being around for 5-10 years and maybe more.\
Just something to consider to all you “Pay it off now” junkies. A paid off house is a big target if you are not protected.
And you beat justkarter for the most assinine post of this thread…and who thought it was possible?
Joe
November 3, 2009, 6:15am
63
LUKE L should look into post fail insurance.
LUKE_L:
There is one thing to mention about this. Suppose you get a 15 year mortgage but forget to get an “umbrella” insurance policy which is seperate from your normal homeowners/auto insurance. You pay off the house. Some idiot gets hurt either through their neglegance or yours and has a team of layers come after you…but your insurance company (without an umbrella policy) will only cover $100,000 in damages. So the idiots insurance gets the case settled for $300,000. Remember all those personal injury commercial you see? Now you are the one being sued. Your insurance wipes their ass with $100,000 check because that is all your dumbass signed up for and hands it over. Now it is up to your to cover the rest. Supposed that nice new house is paid off but your car is not. Guess what gets liquidated first? Now you are out of a house, your wages are garnished, and you suck because you can’t pay for your car and the Bank repossesses it.
Now supposed you don’t have the house paid off but you have an “umbrella” policy that covers you up to $1.5 Mil. For pennies on the dollar you can get a policy. Literally $10-$50 bucks a month will cover you. Now when the idiots lawyers come to sue you the lawyers of your $1.5 Mil policy will fight to get it thrown out or end up covering a lot more of the damages. Plus, if you house is NOT paid off there is NO WAY they can take it because it has a lein on it.
You could combine the two but why waste all your money upfront? Here Mr. Bank take my $100K now and then tomorrow a tree rips through the roof and now you just bought a broken house. Unlikely, but possible. WHy invest so much up front. To me, that does not make sense. If it does not make sense you must acquit.
Moral of the story…get the longest mortgage policy at the lowest rate, make minimum payments, get as much protection as you can, and live a worry-free life. As far as saving $50K-$100K on interest…you have a guarantee of NOT losing you house if the bank owns it as long as you pay the minimum each month. This may only be worth it if you plan on being around for 5-10 years and maybe more.\
Just something to consider to all you “Pay it off now” junkies. A paid off house is a big target if you are not protected.
I truly hope you are not a financial advisor, if so :purextc: for your clients…
neonglh
November 3, 2009, 6:35am
65
TurboTSi:
I’m not sure if you signed into a 30 year mortgage and are looking for any excuse to make yourself feel better or what, but the bottom line is you will end up paying $60,000 + more than someone on a 15 year mortgage.
IF, he only makes the minimum payment. A 15 year mortgage at the minimum rate and a 30 year mortgage paying extra are exactly
Joe
November 3, 2009, 6:43am
66
15-years have cheaper interest rates.
neonglh
November 3, 2009, 6:57am
67
Good point, it is noticable, but not crazy. For example:
with a 5.125% interest rate on a $100,000 30 year mortgage, you’d pay $96,015.31 in interest
with a 4.625% interest rate on a $100,000 15 year mortgage, you’d pay $38,851.49 in interest
Both of those would mean you are making the minimum payment of $544.49 and $771.40 respectively. So, to have the same effect as the 15 year, lower interest mortgage, you would have to pay around $864.49 a month, which is almost a hundred dollars more per month. So, yeah, good point. It is smarter to go with a 15 year mortgage and make the minimum payment then get a 30 year and pay more :tup:
Touche!
Joe
November 3, 2009, 7:12am
68
I just ran that calculation when I decided to go with a 15-year over the summer. Of course, I also locked it at 4.25% so that made the decision easier
neonglh
November 3, 2009, 7:25am
69
Whoa, what bank? I have a 788 credit score, and haven’t seen rates like that!
Joe
November 3, 2009, 7:28am
70
HSBC. Employee rate, sucka
walter
November 3, 2009, 7:59am
71
I didn’t read the thread, but 1995 called and they want their advice back :feck:
it’s definitely not just about the house/monthly payment
repairs are a HUGE thing to consider. For example, 2 months after we moved in, our washer died. FUUUUUUUUUUUUU. Then, I was in the crawl space this weekend, and found 2 leaking water pipes. FUUUUUUUUUUUUUU. You need to ACTUALLY take care of your property. Trim trees, mow grass, etc…Thank god I am handy, because I probably saved myself a shitload by just buying some pipe and fittings, but this shit can get pricey.
You have to think about this shit, or you could get burned.
drvnkd
November 3, 2009, 9:04am
73
When my soon to be wife was pregnant, the house hunt started.
LUKE_L
November 3, 2009, 9:39am
74
TurboTSi:
Seriously?
Need to re-read this:
My “suggestion” was not about saving money on a house. It was about not being protected and insured on a paid off house.
[QUOTE=LUKE_L;1511145]+
Need to re-read this:
QUOTE]
I did, as well as everything else you tped in that post. I stick with my original theory, thank you very much.
You missed the point on the fact that someone can still sue you and place a lein on the house that you are making mortgage payments on. Your post should have read:
You should get insurance on your house.
