Thirty years is a long time, and life is full of surprises. Do you know how you’d make your mortgage payment if you were out of work for several months, if a health crisis drained your savings, or if you or your spouse were to die? Make a back-up plan now, and you’ll thank yourself later.
Many families rely on
life insurance or
annuities to protect their mortgage. They factor in the mortgage balance when deciding what level of benefits they need. You can also use
savings accounts and money-market funds to make sure funds are available for short-term needs.
How about your home equity loan? If you have a line of credit, you can use the money for anything you want—to fund vacations, pay off credit cards, or cover other shortfalls. But keep in mind that you’re putting your house on the line. Decide ahead of time how large a monthly payment you can afford, and make sure you stay below that amount.