Tuesday, May 14, 2013

Make Your Home Is an Investment and a Liability

For years, homeowners have had pride in home-ownership. Lately, the American dream of home ownership has been threatened for many in our country. Here are some tips to help you maintain your greatest possession: Understand that your home is an important debt The biggest debt that most consumers have is their home loan. Your home is your castle. Hopefully, you didn't buy more castle than you can afford. You may have assumed that the value of your home would never drop. Maybe you were hoping that your income would increase so that you could afford the higher payments. Maybe you forgot to add in the cost of maintenance, insurance, and taxes on your house. For whatever reasons, many people fool themselves into buying more house than they can comfortably afford. Hang onto your home If you bought your home with an adjustable-rate mortgage (ARM), the interest rate on your loan may be resetting to a higher rate soon. If you have an ARM, make an appointment as soon as possible with your home loan provider. Assure them that you will work with them closely to keep your home. Get a printout of your reset mortgage estimate, including what your new monthly mortgage will be and when it will start. If the reset rate is higher, you will have to pay more each month to keep your home. Start preparing for this new expense immediately. If you have good credit and want to avoid the uncertainty of adjustable interest rates, you can try to refinance your home with a fixed interest rate. In a time of tight mortgage credit, however, this can be more difficult to do. If you need to refinance and you can't find a new loan, ask your lender for help. Document your efforts. Avoid foreclosure Many homes across the country go into foreclosure. If you are afraid that you can no longer pay your home mortgage, you may be facing foreclosure, too. Whatever you do, try to avoid foreclosure. Here are some online resources to help you prevent foreclosure: · hud.gov/foreclosure (800-569-4287). HUD is the U.S. Department of Housing and Urban Development. This site lists HUD-certified credit and foreclosure prevention counseling agencies. · housing.org (888-331-3332). Project Sentinel is a local HUD-certified counseling agency. · nhssv.org (408-279-2600). Neighborhood Housing Services Silicon Valley is another local HUD-certified counseling agencies. · homeloanlearningcenter.com. Mortgage Bankers Associations Home Loan Learning Center has information under Your Finances, then Foreclosure and Delinquency. · 995hope.org (888-995-HOPE). This is the site for Home ownership Preservation Foundation.