Dear Money Guy,
After watching the devastating effects that a death can cause, I am very interested in setting up a financial safety net in case anything were to happen to me. My brother didn't have life insurance, and his wife and kids are left in a real bind (he was the sole breadwinner of the family).
So my question is, what is the average price of life insurance?
- Mark J.
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Dear Mark,
Sorry to hear about your brother's death and the hardship it will cause for your sister-in-law and family. Having life insurance can sure help in these type of situations. As for you question, "What is the average price of life insurance?" Well, that's a bit complicated.
You see, there are so many factors that go into determining the amount of premium you will be required to pay, that coming up with an "average" just doesn't work.
Here are some things to consider:
1. Term life insurance is less expensive than whole (permanent) life insurance.
2. Smokers have to pay more for their life insurance premiums.
3. The older you are, the higher your monthly premiums.
4. Whether or not you have pre-existing medical conditions can drastically affect your premium payments.
5. The greater the amount of coverage you need, the higher the premiums.
And the craziest thing about all of this, is that each life insurance company uses different factors to come up with their life insurance rates. So your best option is to get free life insurance quotes from a variety of insurance companies, and compare those quotes to each other.
To save you some time, I have found two life insurance companies that provide free quotes online. They just need some basic info from you to process your quote (name, email address, age, gender, etc).
Here are two life insurance companies I recommend getting quotes from to compare:
1. NetQuote
2. Mysurance
After you complete and receive your free quotes, you'll have a much better idea of what the average price of life insurance is for you specifically.
Regards,
The Money Guy
What Is The Average Price Of Life Insurance?
Mortgage How Much Can I Borrow
Dear Money Guy,
Look, I'm no dummy. With the housing market in the dumper, now is the perfect time to buy a home. I have been a renter for far too long. Such a waste, really. But I was just never in the financial position to be able to buy real estate. Either my credit wasn't good enough, or I wasn't working at my job long enough to qualify for a loan program that would get me into a home. When it came to a mortgage, how much can I borrow never crossed my mind because I knew I didn't qualify for anything.
But that has changed over the last few years. I have stayed with the same employer for over five years, and am making more now than I ever have before. I also worked really hard on getting my credit score above 670 (thanks mostly to this product that I bought called Credit Secrets Bible).
I am ready to take advantage of this housing marketing and buy my first home.
My question: with a purchase mortgage, how much can I borrow?
I really need to know the answer to this question. I can't wait to start looking at homes.
- Peter N.
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Dear Peter,
You are absolutely correct. As a potential buyer, the housing market hasn't been this good in years. You're smart to try and take advantage of this opportunity.
Now to answer your question on the purchase mortgage, "How much can I borrow?"
Many lenders use a front end ratio to determine how much of a loan borrowers can get. The magic number is 28%. What this means is that lenders tend not to give loans where the monthly housing costs (mortgage payment, insurance, and taxes) is greater than 28% of the borrower's monthly income.
So if you are bring home $4000 in gross income each month, then your maximum housing costs cannot exceed $1120 per month (giving you roughly a $170,000 loan on a 30 year loan at 6%).
But honestly, the internet makes things so much simpler. By answering a short questionnaire, you can know exactly how much mortgage you can borrow. The great thing about these quotes is that they are free, quick, and can be done online at your convenience.
Here's a reliable lender that you have heard that provides this service:
You can do further research, but Lending Tree is unique in that they pass your information to a pool of mortgage companies (who compete for the ability to work with you). So by filling out this one online form, you can get a number of no-obligation free quotes at once.
Hope that helps. Good luck in house hunting!
Regards,
The Money Guy