I met her while looking for a chicken coop. “Sandy” was selling everything…because she had to. A month before, her husband was helping a friend when he suddenly keeled over. Dead at 59.
He loved his wife of 25 years, and his two kids. (She definitely loved him.) They’d had a busy, happy life and lived in the same house for nearly all of that time. She wanted to keep staying there.
But his was the only name on the mortgage papers.
(No will, either.)
Even though she and the kids would obviously inherit, eventually, the bank would not let them stay. Unless, that is, she wanted to buy the place from them. At the price they set.
She had no income. (Husband was the primary wage earner, and she was a stay-at-home mom.) She couldn’t qualify for a mortgage — even if she’d been willing to buy her own place back.
She had 45 days to move.
I drove home, thanking God all the way that my husband, the Brick, insisted that we put both our names on large purchases. If something awful happened, neither of us would be forced to give up our home or vehicles.
This scenario is more common than you think. One of the Brick’s friends from work went through a nasty divorce and was forced to leave her home, with kids in tow, for this same reason. She couldn’t afford to ‘buy’ the home she’d been living in for decades, even though her ex didn’t want to keep it. (He ended up staying in the house, so they wouldn’t lose it to the bank. Yet.)
The moral of the story: if you’re co-paying for a home — or vehicle — or boat — or trailer – put both your names on the title. If you divorce or separate, the equity you’ve been contributing to will be divided. If your partner dies, you’ll be able to keep paying on it, without worrying that the bank will snatch it away.
Make it even better with mortgage protection insurance. This is not a regular part of homeowner’s insurance; it automatically pays off the debt, if one person dies. (Some even cover payments if the owner loses their job, or are disabled.) It’s generally reasonably-priced. And it’s a godsend. We know this firsthand. When the Brick’s father died quite suddenly from a massive heart attack, the Missouri property he and Mom had been planning to move to was completely paid off. It gave her incredible peace of mind, at a time she desperately needed it.
Oh that “Sandy” could have had that, too.
Cindy Brick writes from her home office in Colorado. Visit her at her home blog, A Brick Looks At Life, for four more ways to protect yourself, without even thinking about it.