MORTGAGE MELTDOWN...how NOT to become a statistic!
Easy credit...we mean REALLY easy credit, among other reasons, has created a mess in the mortgage market across America. Simply stated, much of the problem is coming from the billions of dollars of adjustable rate mortgage (ARM) money with rates that are currently adjusting UPWARD. Many Americans simply cannot continue to make the higher monthly payment. Additionally, those who with poor credit who were able get a mortgage during easy credit times (if they could breathe and sign a loan application) are now finding it nearly impossible to even refinance their mortgage because many lenders have (finally!) toughened their credit standards.
1. If you do qualify to buy a home…GET A FIXED RATE MORTGAGE ONLY.
2. Do your best to put 20% down on a home purchase to avoid PMI (private mortgage insurance).
3. If you own a home and you think that you’ll need extra money in the future for a good reason (home improvement, college expenses, etc.), get a home equity line of credit NOW. House values are still relatively high, so it is advantageous to do this based on the value of your home’s present value. If you need it, you’ll have it; if you don’t use it, it will cost you nothing until/if you need it.
4. Borrow LESS money to buy a home than you are able to afford to pay back…things change!
5. If you have an ARM and you plan to be in your home for more than 5-7 years, switch to a fixed rate mortgage now!
In our opinion, tough times are still ahead for the housing market. Be smart...DON'T BECOME A STATISTIC!
Be sure to join the Dolans Saturdays at 10am on WOR710hd for more money saving ideas!
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