“Max out your home equity line before your lender cuts off the limit…(and) stop making extra mortgage payments and take out a mortgage even if you don’t need one.”
Those suggestions come courtesy of the CMPS Institute, a 3-year old Ann Arbor, Mich., organization that certifies mortgage bankers and brokers. CMPS says such measures can help consumers protect themselves from today’s “perilous financial storm” on Wall Street.
I beg to differ. Given all of today’s mortgage-related woes, those ideas seem breathtakingly out-of-touch.
Granted, people do want or need mortgages and equity loans to ease financial burdens, no matter the economic conditions. And max-mortgages for the well-heeled do work.
But many consumers quake at the idea of taking such loans, for fear the debt load will crush them, especially if job or other income sources are iffy. Still others scoff at the idea of not paying off a mortgage early if possible, especially if near retirement.
What consumers need to know is that other financial tools are available to help build financial security.
Those “other tools” include fixed, indexed and variable annuities–many of which have multiple liquidity and guarantee options–and cash value life insurance. If these products are held in a portfolio alongside guaranteed banking products, Treasuries and other conservative investments, consumers could weather today’s financial storm in solid shape, and with room to spare for judicious risk-taking.
Unfortunately, the CMPS tips do not mention such products, nor do they mention matching options to needs and goals.
It therefore behooves insurance and financial professionals and providers to deliver that message. They should do this not just to promote their own products and services, but also to broaden consumer understanding of all available options and the need for sound financial planning.