I get to busy to blog...until an issue crops up that is more important. Specially one that deceives an elderly local friend on a tight budget. Who freezes me in my tracks saying "It's not right that you need a mortgage in order to get flood insurance". WHAT?!? It's true if your home is in a 100 yr flood zone and you have a mortgage, your required to have flood insurance. But, you don't need a mortgage in order to obtain flood insurance. When asked who told him such a thing..."My financial advisor explained it.. then had me take out a loan on my home...so I could get flood insurance". Slippery sales advice....using the loan money to then finance a large stock purchase thru the same financial advisor. It get's better..
The loan had a fixed payment rate for the first 10 years and the flood insurance was paid by the mortgage company. So the accumulation of the flood insurance costs just kept adding to the loan principal. On the 11 year the loan payments adjusted and tripled to pay back 10 years of flood insurance. He went off to rip his financial advisor and pray the stock investments had decent enough returns.
The loan had a fixed payment rate for the first 10 years and the flood insurance was paid by the mortgage company. So the accumulation of the flood insurance costs just kept adding to the loan principal. On the 11 year the loan payments adjusted and tripled to pay back 10 years of flood insurance. He went off to rip his financial advisor and pray the stock investments had decent enough returns.
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