Mortgage Loan As A Harbinger of Foreclosure
–By Priya Jestin, Staff Writer
There’s one good thing about bad news — more often than not, it sends you some form of warning before arriving. No, I’m not joking. If you look hard enough, you’ll find a pattern just about everywhere — from natural storms to stock market crashes. Well, I’m dealing with neither but with something more closer home — foreclosure. It is important to know the warning signs of foreclosure to prevent it from happening to you. So, what exactly are these signs?
Is your house worth less than what you owe? I know this sounds odd especially when house prices are not exactly crashing. But this is a very real possibility. The risk of foreclosures is very high if you’ve taken a loan in excess of 80 percent of your home’s purchase price. The problem is that you are stretching your budget well beyond your means. And in the event of a fall in prices, you could be badly stuck.
Exotic Mortgages: I think I’ve written more and enough about Adjustable Rate Mortgages, other exotic loans and the risks associated with them. For a short period of time, monthly payments are quite low and bearable, and then the problems begin.
Behind on mortgage payments: This is one of the biggest indicators of a coming problem. There could be many reasons like loss of job, illness, death in the family — of the earning member. Just about anything that contributes to reduction in income could adversely affect your payment capacity.
You can address all these factors. But time is of essence. It is important to contact a skilled lawyer before foreclosure starts.
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November 8th, 2006 at 3:24 pm
Cash Out Refinance Loans At 16-Year High
Homeowners continue to prefer cash out refinance loans to other forms of borrowing. Frank Nothaft, Freddie Mac vice president and chief economist, says,
“Mortgage borrowers continue to refinance their mortgages at a higher frequency than historically would have occurred given the rise in mortgage rates over this year. But the wide proliferation of adjustable-rate mortgages (ARMs) originated in the past few years that are nearing their first interest-rate adjustment provides borrowers an incentive to refinance into a lower-cost ARM or fixed-rate mortgage. In addition, borrowers who might have considered a prime rate home equity loan for a home improvement or other need are turning to cash out refinance options now that the prime rate is above 8 percent.”
You can learn more about refinancing and get a free loan quote at sites like Simple Mortgage Refinancing and Bad Credit Mortgage Refinancing Now.