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Having Trouble Paying Your Mortgage? Don't Panic! |
You would have to be on a desert island
not to
know that people are struggling to pay their
mortgages with the current state of the
economy. Sad
anecdotes abound about people losing their
homes
because they can't make their mortgage
payments. If
you are having trouble with your mortgage,
you
know the
situation is more than just sad - it can be
devastating.
Step back for a moment. It is important not
to panic,
and to know all your options.
To add insult to injury, many lenders are
freezing or
lowering the limits on home equity lines
because of
declining home values - and because these
financial
institutions do not have the money to cover
the lines.
As a result, many homeowners are finding
they have
little to no financial cushion. It can be scary
to realize
that you don't have the money for next
month's
mortgage payment.
The key is to communicate with
lenders and
not to walk away without a full understanding
of the
consequences. While it may not have been
the case a
few years ago, today you probably know
someone
who has walked away from a property
simply because
they could no longer afford it.
Before you panic and walk away, however,
think about
what foreclosure would really mean.
- You lose all the equity that you have
invested in
your home to date.
- If your home is foreclosed, the situation
becomes
public
record.
- It destroys your credit for up to seven
years.
- You can be held liable for losses the
lender incurs
when trying to sell your home.
- You have to live somewhere. Friends
and family
may help out temporarily, but this is rarely a
permanent solution.
Instead of panicking and bailing out, reach
out to a
trusted real estate professional who can
help you
consider all your options. I had a client who
realized
he was 30-60 days away from not being
able to make
his mortgage. Feeling fear and panic, he did
the right
thing and reached out to his lender. What he
received
back was a frightening document that
stipulated
mortgage relief, but offered none. This is
why it's
important to have a trusted professional on
your
financial team who understands the industry
and your
rights and responsibilities as a homeowner.
Don't
sign anything until you talk to one!
There are several options your lender may
offer:
Refinance. This allows you to
refinance the
current
loan into a new loan. For example, you could
refinance
from an ARM into a fixed-rate loan, or
change some
other terms of the loan.
Repayment Plans. Lenders may
allow you to
pay a
small amount more for a few months if you
got behind
on previous months.
Forbearance. Lenders may allow
you to
postpone the interest or payments on the
loan for a
fixed period of time.
Quick/Short Sale. In this case, the
homeowner sells the property for less than
the loan,
and the lender considers the loan paid in
full.
The bottom line is that you do have options.
Avoid
foreclosure by talking to a trusted mortgage
professional and finding a solution.
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December's Home Value Improver |
Your Unfinished
Basement
With the real estate market slow, a lot of
homeowners
are staying put and deciding to make the
most of their
current home. People are starting to take a
long, hard
look down the basement stairs and asking
themselves some questions:
- Should I finish my basement?
- If so, can I afford it?
- Should I do it myself with a "basement
finishing system" or hire a contractor?
Like many home improvement situations,
there are no
easy answers. Many people want to know:
Will I get
the cost of a basement remodel back when I
sell my
home?
Realtors give mixed reviews on this topic.
While some think that prospective buyers
want
everything finished when they move in,
others report
that while a finished basement is a bonus, it
is not a
deciding factor in a home purchase. Others
report that
whether a finished basement adds enough
money to
your home sale to be worth it depends on a
few
important factors such as: Is your home
short on
bedrooms, and one in the basement would
make it
more marketable?
If you do decide to finish the basement, what
route will
you take? This is one area where you really
need to do
your research. < br>
Many basement finishing systems use
high-pressure sales tactics, and don't tell
the whole
story when it comes to pricing. Some people
like the
systems. If you decide to use one, be sure
to get a
detailed proposal. I had one client who was
quoted
$22,000 for a complete basement refinish
including
walls, electricity, and carpeting. After asking
about the
types of products the company would use,
my client
priced it all out himself with individual
contractors. He
got the exact same basement that the
basement
finishing company planned and paid only
$14,000.
Like many home improvement projects:
Buyer Beware!
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It's one of the more stressful holiday
seasons in recent memories, as many
individuals and families struggle not only
with home ownership issues but also with
job loss, home eating costs and a gloomy
economic outlook.
It's a good time for all of us to remember
what really matters - the people in our lives. I
am so grateful for my family and friends and
look forward to spending some time with
them this holiday season. I hope you are
able to relax and enjoy your loved ones as
well.
As always, please feel free to call or
email anytime for
more information on any mortgage topic!
Best regards,
Debbie Siegel
President
Westchester Mortgage
P.S. You're receiving this E-Newsletter because you have a prior relationship with me or with Westchester Mortgage. If I've sent this to you in error, or if you want to remove yourself from the list at any time, just click the "SafeUnsubscribe" link at the bottom of this e-mail.
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Click here for some tips on
how to choose a mortgage broker!
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