Monthly Archives: September 2013

Life Mortgage Insurance: Merits And Demerits

Life Mortgage InsuranceIt is extremely important to save your family from any financial crisis related to mortgage loans incase you might die without paying the huge debt back to your creditor. This can be done if you have life mortgage insurance. If you die and your family has to pay back the mortgage loan you had acquired then with the help of life mortgage insurance your relatives will be able to payback the loan that was initially taken by you. You must invest in this kind of insurance policy as soon as you avail a mortgage loan so that the premiums are much cheaper.

However, it is your responsibility to understand the life mortgage insurance better because without proper knowledge of it you will not be able to make full use of it. Many buyers end up investing in policies that do not benefit them at all. Thus here are certain merits and demerits of life mortgage insurance so that you can weigh them and decide whether this type of insurance is good for you or not.

Through the life mortgage insurance you get lump sum of money, affordability, no penalties and joint policies. This policy ensures to your family members that their property will not be repossessed. Plus it is a more reasonable alternative for the people who are already indebted. If you want to switch to some other insurance policy, you can freely do so without having to face any penalties.

The life mortgage insurance is not overwhelming as such because there are many areas that it does not cover for such as bill payments. Incase you do not pay your premiums then the insurance coverage will automatically stop. Thus getting cash-in value will become impossible for you. Along with these another disadvantage is that you will have to subtract some amount of money from your already tight budget.

Merits and Demerits of Debt Consolidation

Debt ConsolidationMany of you must be under tremendous pressure because you must have taken loans from different sources or you might have many credit card balances due. However, you should not become really stressed out because you have the option of consolidating all your loans and credit card balances into a single monthly payment. A specific rate of interest will be charged on the amount of debt that is consolidated into the single loan. Here are some of the merits and demerits of debt consolidation.

Merits:

Once you consolidate your debts, the amount of interest charged can be reduced through proper negotiations with your creditors. The reduced interest rate will allow you to pay off your monthly payments on time and will help you save some money as well. Debt consolidation involves only one payment which makes it quite comfortable and convenient for you to pay off your different debts easily. It will also give you the opportunity to pay your debts on time and thus you can avoid paying late fees. Consolidating your debts will also enhance your credit standing and score since you will not become a defaulter or pay your loan late. If you take the help of a consolidation company then all negotiations will be carried out by it so that you can remain stress-free.

Demerits:

In order to consolidate your loans you need to provide collateral such as your car or house. This way you have the chances of losing your asset. Debt consolidation may encourage you to take more loans since you will not have much pressure regarding the single consolidated loan you have to pay off. It is said that people have to pay lower rates of interest if debts are consolidated. But this is not true. Getting lower rates of interest is difficult and depends on the negotiations you have with your creditors.