Posts Tagged ‘mortgage payment’
There’s no doubt that this shaky economy has made everyone nervous, especially new home buyers. A mortgage is unlike other types of short-term loans, like a loan until payday which is paid back in the next paycheck cycle. Instead, a mortgage is a financial obligation that last decades from between 15 to 40 years, depending on the type of mortgage loan you take out. For home buyers who are wondering if their jobs will survive another year, the prospect of getting into that much debt for that many years, especially now, is particularly frightening. However, there are still some things to remember that make home buying a stable way to grow wealth, even in uncertain times.
Fixed Payments
As long as you opt for a fixed rate loan, your mortgage payment will remain relatively the same from the start of the mortgage to the end of it. Apartment rentals, on the other hand, tend to increase yearly as landlords try to get more out of their tenants year after year once the lease ends. If you buy a home that can be paid for on one income, in a two-income household, this can be a much more stable than renting. Even if you lose both incomes, the foreclosure process can take months, if not years, before you have to leave the home, unlike an apartment which can evict you much sooner.
Low Rates, Great Deals
The mortgage rates are very low and probably won’t remain that way once the economy starts to heat up more. The inventory of houses and low prices mean that this is definitely a buyer’s market. With many homeowners waiting to sell their homes so they can upgrade, a buyer has the advantage and can ask for many concessions to sign the contract.
Still Need Good Credit
Credit still has to be good, but the freeze on credit is loosening. You can get a better deal if you have 20% of the home price upfront for the down payment. You can even buy insurance to protect you in case you lose your job and need to keep up with mortgage payments. Getting the home seller to fund the purchase of a maintenance plan for the first year can also help you from unnecessary expenses when you first move in.
Missing your mortgage payment for one month might be okay but if you know that you will not be able to make future payments, then you need to take action fast.
Here are the ways for avoid foreclosure:
Recognize The Problem.
Act at the very first sign of a problem. Remember, the further behind you are on your payment, the harder for you to reinstate your loan.
Talk To Your Lender As Soon As You Realize That There Is A Problem.
Lenders offer options to borrowers who are undergoing financial difficulties. These options help borrowers with temporary financial relief including reinstatement, forbearance, loan modification, and repayment plans. Ask your lender about the best option for your particular case.
Read And Respond To Every Piece Of Mail You Receive From Your Lender.
Notice of Foreclosure letter contains information about the different foreclosure prevention options you can get. Succeeding mail may contain important notices of pending legal action. Failure to read and respond to the mail is not excusable in foreclosure court.
Keep Informed Of Your Mortgage Rights
Before you sign the mortgage papers, you are advised to read and understand everything the agreement says as they contain information about the possible actions that the lender may do if you have failed to make regular payments. Now that you arrived in this situation, read foreclosure laws in your state. Call the State Government Housing Office to know the timeframes.
Consult HUD-Approved Housing Counselor
HUD-approved housing counselors help you know your options, your rights, and how to organize your finances. If you need assistance, housing counselors can also represent you during negotiations with your lender. The HUD or the Housing and Urban Development offers free or very-low cost housing counseling services nationwide.
Spend Wisely
Most Americans wonder why they are still in knee-deep debt even if they fall above the median household income. The answer: they spend too much. What you should do is to prioritize your spending. After healthcare, your next top priority should be keeping your house. Let go of other expenses you can live without like magazine and cable subscriptions. In short: spend wisely
Tap Your Assets
Assets such as an insurance policy, jewelry, and second or third cars can save your house. If you have any of these, you might as well sell them to generate cash to reinstate your loan. You can also get a second job to pay for your house mortgage. Whether or not these actions are enough to reinstate your loan, the lenders can recognize these as an effort on your part that you are willing to make sacrifices to keep your home.