Dear Rick:
I have several financial problems that I hope you can help me with. My first story is that a few years ago when I bought my house, I originally thought I would live in the house for a few years and so, I got a mortgage.
My goals changed and I plan to stay indoors for a lot longer than I expected. As a result, my mortgage has changed and my value has skyrocketed, and I don’t know what to do. I can’t afford the new payment. What options do I have?
My next question is about my life insurance. I have a 10 year plan that is growing. When I went to buy a new policy for 10 years, the price was too high. I don’t know if I still need this plan, but I want your opinion. I have no dependents, but I have two grown children who live alone.
Thank you, Julie
Dear Julie:
The first thing I would recommend about your home is to contact a real estate agent. There may be another program you qualify for that may be beneficial to you.
In addition, I also look into the Michigan Homeowner Assistance Fund. The program was established as a result of the American Rescue Plan Act of 2021. The program is to help homeowners who are experiencing financial difficulties due to the coronavirus. Under the program, if your family’s income is less than 150 percent of your income, the property is your primary home, and if your financial hardship was caused by COVID-19 on or before January 21, 2020, you may be eligible for up to $25,000 in assistance from the program. For more information about this program, you can contact them at 1-844-756-4423.
If you don’t qualify for any of the programs, one option you may want to consider is selling the home. Home prices are still good for sellers, and you may find that by selling the home, you can find affordable homes.
Your mistake would be to do nothing and hope this will go away, because it won’t. Unfortunately, inflation will be with us for a while, and it’s important to do something about your home while you still have options.
More information:Rick Bloom: Adding a child’s name to the house, property can cause conflicts in the family, financial risk
More information:Changing family finances can save you money in the long run
When it comes to life insurance, I’m a firm believer that not everyone needs life insurance. The question you ask yourself is that when you die there is someone who loses money. Since your children are independent and not dependent on you financially, you may not need life insurance. Remember, life insurance is not money; it is a matter of risk management. Ten years ago, you had the risk of your children becoming financially dependent on you. Today you don’t; So, in my opinion you don’t need life insurance.
I have always believed that all forms of insurance are a matter of risk management. If you have no risk, you don’t need insurance. For example, I don’t have boat insurance not because I don’t think boat insurance is important, but because I don’t have a boat. With life insurance, we all know that eventually we will pass; However, the secret is when we go through there is anyone who will be hurt in your finances. If not, you don’t need insurance. Some insurance people like to think that insurance is a good investment; I don’t believe that. As far as I know, if I have to die for the money to pay, it’s not the best money.
Good luck!
Rick Bloom is an independent financial advisor. His website is www.bloomadvisors.com. If you would like him to answer your questions, email rick@bloomadvisors.com.
