Tips

Avoiding Foreclosure

Making your mortgage payments on time is the best way to avoid foreclosure.  Job loss or health problems can put you in a bad spot financially, and one of the worst case economic disasters for anyone is a foreclosure.  If you are unable to make payments, contact your lender and see if you can renegotiate your loan to something more manageable.  Freddy Mac recently stated that 50% of homeowners who went into foreclosure had never contacted their lender to discuss renegotiation.  They would usually rather have something as apposed to nothing.  You may also consider refinancing with a completely new lender.  Bankruptcy is usually not a good option in dealing with a foreclosure.

Foreclosure

I decided I should take some time to discuss the dreaded foreclosure.  A lender may foreclose on your home if you fail to meet certain conditions associated with your loan, typically non-payment.  The house may then be sold, and the money gained from the sale goes towards the outstanding balance.  In some jurisdictions, the home owner is still responsible for any outstanding debts, and in some they are not.  Check your local legislation to find out which category your location falls under.  In some areas, foreclosure and sale can occur rather rapidly; while in in others it can take months and in some convoluted cases even years.

Refinancing

Refinancing is essentially taking out a loan to replace the one you currently have, in hopes of getting a better rate.  With the recent economic crisis, refinancing and debt consolidation have become very popular.  There are many reasons to refinance.  The current interest rates are very low, if you entered into your mortgage at a higher interest rate, it would be in your benefit to refinance today.  The penalty for breaking a mortgage contract and signing into another one, is usually not nearly as much as the cost of the higher interest rate.  The first step to take is to talk to a mortgage professional, they can calculate exactly how much refinancing will save you and whether or not it is the right option for you.

Increasing Your Homes Value

Small investments in your home can result in large profits.  Start small, sometimes something as simple as painting
your house can offer a greater return than adding a deck.  Remodeling does not always increase the value of the home by much more than the cost of the remodeling.  Here are a few tips to easily improve your homes appearance and value:

• Make your yard more aesthetically pleasing
• Add a fresh coat of paint to the exterior and interior
• Install new light switches and fixtures
• Wash your windows and have your carpets professionally cleaned
• Pressure wash the driveway and any walkways on the property
• Use higher wattage bulbs to make things seem a little brighter
• Well placed flowers and fruits can make even the most boring house appealing

Three Tips For Getting The Best Mortgage Rate

• Your FICO score -  The difference between a 700 score and a score of 698 can be half a percentage point.

• Debt to Income Ratio -  A bad ratio can take you out of mortgage eligibility all together, and can also effect your rate.

• Make sure your bank has multiple lenders, at least 5. 

As always, make sure to get the best rate by shopping around.

Purchasing Your First Home

When buying your first home it is important to be well informed on the mortgage process so that you can take advantage of the best rates available. The FDIC offers information on how to find a mortgage or home loan as well as getting the best deal.


If you are looking for a non-traditional home loan, this brochure provided by the FDIC offers information on alternatives.


Before you sign anything, it is paramount to determine if you are dealing with a reputable Mortgage Broker. Do your research and make sure they are properly licensed
.