So, you have either gone through foreclosure or come very close to it. If you have missed three or more payments on your mortgage, your credit has been severely affected. How do you rebuild your credit score after foreclosure, and why is it so important?
Tune into Foreclosure Exposure Radio tomorrow at 3PM Eastern/12PM Pacific to hear a step-by-step plan of action for boosting your credit score and the steps you must take to ensure it does not dip in the future. Joining me is Terrence Johnson of Blue Point Financial Alliance – this is an episode you don’t want to miss!
Tune in each Wednesday at 3PM Eastern/12PM Pacific on VoiceAmerica’s Business Channel! Missed a show? Listen to the archives at www.foreclosureexposureradio.com!
Showing posts with label Foreclosure Tips. Show all posts
Showing posts with label Foreclosure Tips. Show all posts
Tuesday, April 14, 2009
Tuesday, March 31, 2009
7 Tips for Saving Your Home from Foreclosure
With recent news that foreclosures continue to rise despite lender efforts, it's time to repost the 7 tips!
1. Understand your foreclosure deadlines. All this takes is one simple step: Open your mail. You’ll find out what your deadlines are, the amount of your arrears (the amount necessary to get your payments current), what fees you are being charged for the delinquent payments, and your total payoff amount.
2. Face your finances. What is your complete financial picture? You must understand this before you communicate with any lender or third party. Know your net income, expenses, savings, and liquid cash. All this factors into the options you will have to save your home or credit.
3. Communicate with your lending partner. Only after you have assessed your financial picture and learned your deadlines should you contact your lender. It may be difficult to get to the decision maker, so be persistent. Agree to a workout only if it corresponds with your financial picture – it is worse to agree to a plan that you cannot afford than to negotiate a plan that works for you.
4. Evaluate additional options. You have more choices than you realize when facing foreclosure. This is when the discussion of bankruptcy, selling your home on the market or to an investor, or refinance should come into play – you need to explore all possible alternatives at this time.
5. Reach out for help. Professional help can only enhance your foreclosure prevention game plan. Seek advice from certified housing counselors to help you review your options and learn about available assistance.
6. Communicate with family members. Understanding that foreclosure can be embarrassing and stressful, this is not the time to hide the problem from family members who are affected by the situation. The stress of keeping it to yourself will increase the likelihood of losing your home.
7. Protect yourself against scams. If individuals offering services or wanting to purchase your property approach you, document everything. Check their personal and business backgrounds with state consumer protection offices and the Better Business Bureau. Ensure that you review offers with professionals before committing, and watch out for “too good to be true” offers and those who try to rush you through the process.
1. Understand your foreclosure deadlines. All this takes is one simple step: Open your mail. You’ll find out what your deadlines are, the amount of your arrears (the amount necessary to get your payments current), what fees you are being charged for the delinquent payments, and your total payoff amount.
2. Face your finances. What is your complete financial picture? You must understand this before you communicate with any lender or third party. Know your net income, expenses, savings, and liquid cash. All this factors into the options you will have to save your home or credit.
3. Communicate with your lending partner. Only after you have assessed your financial picture and learned your deadlines should you contact your lender. It may be difficult to get to the decision maker, so be persistent. Agree to a workout only if it corresponds with your financial picture – it is worse to agree to a plan that you cannot afford than to negotiate a plan that works for you.
4. Evaluate additional options. You have more choices than you realize when facing foreclosure. This is when the discussion of bankruptcy, selling your home on the market or to an investor, or refinance should come into play – you need to explore all possible alternatives at this time.
5. Reach out for help. Professional help can only enhance your foreclosure prevention game plan. Seek advice from certified housing counselors to help you review your options and learn about available assistance.
6. Communicate with family members. Understanding that foreclosure can be embarrassing and stressful, this is not the time to hide the problem from family members who are affected by the situation. The stress of keeping it to yourself will increase the likelihood of losing your home.
7. Protect yourself against scams. If individuals offering services or wanting to purchase your property approach you, document everything. Check their personal and business backgrounds with state consumer protection offices and the Better Business Bureau. Ensure that you review offers with professionals before committing, and watch out for “too good to be true” offers and those who try to rush you through the process.
Tuesday, February 17, 2009
How to Stall Foreclosure: Ask the Bank to Produce the Note!
A few months ago, I wrote a post about how to stall foreclosure by asking the bank to produce the ORIGINAL mortgage note to prove the validity of their ownership. Now, the Associated Press has done a story on how homeowners across the country are using this tactic to save their homes.
See the story here: http://www.google.com/hostednews/ap/article/ALeqM5hLOuvy9fguykC2NydTDrkqqyybvQD96DHN5G0
The AP reports, "...homeowners around the country are managing to stave off foreclosure by employing a strategy that goes to the heart of the whole nationwide mess. During the real estate frenzy of the past decade, mortgages were sold and resold, bundled into securities and peddled to investors. In many cases, the original note signed by the homeowner was lost, stored away in a distant warehouse or destroyed. Persuading a judge to compel production of hard-to-find or nonexistent documents can, at the very least, delay foreclosure, buying the homeowner some time and turning up the pressure on the lender to renegotiate the mortgage."
Some mortgage companies have electronic versions of documentation, and judges are accepting this as proof of the bank's ownership. But for those homeowners whose lenders do not have the original paperwork (which happens more than is realized), you can use this to force the bank to renegotiate your mortgage!
Read the article and see if this can work for you.
See the story here: http://www.google.com/hostednews/ap/article/ALeqM5hLOuvy9fguykC2NydTDrkqqyybvQD96DHN5G0
The AP reports, "...homeowners around the country are managing to stave off foreclosure by employing a strategy that goes to the heart of the whole nationwide mess. During the real estate frenzy of the past decade, mortgages were sold and resold, bundled into securities and peddled to investors. In many cases, the original note signed by the homeowner was lost, stored away in a distant warehouse or destroyed. Persuading a judge to compel production of hard-to-find or nonexistent documents can, at the very least, delay foreclosure, buying the homeowner some time and turning up the pressure on the lender to renegotiate the mortgage."
Some mortgage companies have electronic versions of documentation, and judges are accepting this as proof of the bank's ownership. But for those homeowners whose lenders do not have the original paperwork (which happens more than is realized), you can use this to force the bank to renegotiate your mortgage!
Read the article and see if this can work for you.
Monday, December 8, 2008
The Housing Market: Is it a Good Time to Buy?
Recently, on an interview that I did for Weekend Today in New York, the anchor asked if it was a good time to buy property. I said yes, but only if you buy SMART, especially if you are considering buying a foreclosure. Even though there are ample foreclosed properties on the market, watch out for the baggage that may come with them. Specifically, any damage to the property that you would be responsible for, and buying in states that have redemption periods after foreclosures. The previous owner would have the right to regain their property if they paid the full restitution amount and your expenses, leaving you to find another property to live in.
Some additional tips for buying real estate in this market:
1. Carefully research housing values: Housing values may continue to adjust over the next year, so do careful research when it comes to choosing a home. Ensure you a buying a property in a neighborhood that has not been decimated by foreclosures – it may seem like a deal today, but if the values keep dropping, you may have paid more than you needed to. It may be a while before the value of the property begins to appreciate.
2. Prepare for your mortgage qualification. In today’s housing climate, lenders are getting stricter when it comes to approving a loan. Ensure that you have planned effectively for a meeting with a prospective lender – check your credit score, save generously for a down payment, ensure that your current debt to income ratio is below 35 percent, have hard copies of 6 months worth of bank statements and obtain written verification of your employment history.
3. You’d better shop around: With interest rates being low, shop around for a lender who will provide you with the best terms and incentives for your pocketbook. Additionally, find your mortgage BEFORE you begin looking for a property. Instead of falling in love with a house first, ensure that you secure a loan whose terms are within your means, and then find a house that fits with your financial picture.
4. Opt for a fixed rate: A fixed rate mortgage allows you to plan for the long term. If you are just beginning to budget, having your house payments remain the same over the long term increases the probability of remaining on track. If you have an adjustable rate mortgage, ensure that you project early and accordingly for the financial adjustment.
5. Buy smart and plan for your future: Do NOT buy more house than you can afford, and budget conservatively for monthly expenses. Even you hate the “B” word, it is important to apply a budget to your household finances. Creating a conservative financial plan that allows for a sufficient savings cushion, expense allowance, and a bit of spending money will create a foundation that stands up to emergencies.
Some additional tips for buying real estate in this market:
1. Carefully research housing values: Housing values may continue to adjust over the next year, so do careful research when it comes to choosing a home. Ensure you a buying a property in a neighborhood that has not been decimated by foreclosures – it may seem like a deal today, but if the values keep dropping, you may have paid more than you needed to. It may be a while before the value of the property begins to appreciate.
2. Prepare for your mortgage qualification. In today’s housing climate, lenders are getting stricter when it comes to approving a loan. Ensure that you have planned effectively for a meeting with a prospective lender – check your credit score, save generously for a down payment, ensure that your current debt to income ratio is below 35 percent, have hard copies of 6 months worth of bank statements and obtain written verification of your employment history.
3. You’d better shop around: With interest rates being low, shop around for a lender who will provide you with the best terms and incentives for your pocketbook. Additionally, find your mortgage BEFORE you begin looking for a property. Instead of falling in love with a house first, ensure that you secure a loan whose terms are within your means, and then find a house that fits with your financial picture.
4. Opt for a fixed rate: A fixed rate mortgage allows you to plan for the long term. If you are just beginning to budget, having your house payments remain the same over the long term increases the probability of remaining on track. If you have an adjustable rate mortgage, ensure that you project early and accordingly for the financial adjustment.
5. Buy smart and plan for your future: Do NOT buy more house than you can afford, and budget conservatively for monthly expenses. Even you hate the “B” word, it is important to apply a budget to your household finances. Creating a conservative financial plan that allows for a sufficient savings cushion, expense allowance, and a bit of spending money will create a foundation that stands up to emergencies.
Monday, October 20, 2008
The Consumer Bailout That Nobody Knows About
This is a press release that was put out on October 1st by the CMPS Institute. Great advice and insight... important to use when working with your lending partner!
RISMEDIA, Oct.1, 2008: As congress considers various bailout proposals for the financial system, there is a little known ‘bailout’ for home owners that has already been enacted into law, according to Gibran Nicholas, Chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers. Section 1403 of the new housing bill that was signed into law on July 30, 2008 (HR 3221) requires mortgage servicers to modify loans for homeowners and help them avoid foreclosure as long as three requirements are met:
1. Default on the mortgage either has already happened or is “reasonably foreseeable“
2. The homeowner is living in the property as his or her primary residence.
3. The lender is likely to recover more through the loan modification or workout than by forcing the home owner into foreclosure.
“The fact is that this law is effective immediately, and most distressed home owners are simply not aware that they have this option,” Nicholas said. Borrowers make their monthly payments to mortgage servicers, and servicers keep a portion of the payment as their profit while sending the rest to the Wall Street investors who actually own the mortgage.” This law requires servicers to act in the best interest of all their investors and obligates them to modify your loan if you can afford the modified loan terms and if they are likely to recover more for their investors by working with you than by going all the way through the foreclosure process,” Nicholas said.
When negotiating a loan modification with your mortgage lender, it is advisable to follow this four step process:
1. Make sure you are dealing with your lender’s loss mitigation and/or work out department.
2. Write a hardship letter demonstrating job loss, serious medical condition, balloon payment coming due, adjustable rate reset or some other financial calamity that will make it impossible for you to continue making your mortgage payments as scheduled. Unless you are in imminent danger of default as required by this new law, lenders are not likely to work with you.
3. Send the lender your financial statements, employment records, tax returns and bank statements demonstrating how you would be able to afford the modified loan terms under your present financial circumstances.
4. Send the lender a current appraisal of your home or some documentation on recent comparable sales in your neighborhood demonstrating the current value of your home. “The key is to demonstrate how the lender is likely to recover less money through foreclosure than they would by working with you in your proposed loan modification plan,” Nicholas said.
It may be advisable to consult with your attorney- especially if you qualify for a loan modification under the law and your lender still refuses to work with you.
RISMEDIA, Oct.1, 2008: As congress considers various bailout proposals for the financial system, there is a little known ‘bailout’ for home owners that has already been enacted into law, according to Gibran Nicholas, Chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers. Section 1403 of the new housing bill that was signed into law on July 30, 2008 (HR 3221) requires mortgage servicers to modify loans for homeowners and help them avoid foreclosure as long as three requirements are met:
1. Default on the mortgage either has already happened or is “reasonably foreseeable“
2. The homeowner is living in the property as his or her primary residence.
3. The lender is likely to recover more through the loan modification or workout than by forcing the home owner into foreclosure.
“The fact is that this law is effective immediately, and most distressed home owners are simply not aware that they have this option,” Nicholas said. Borrowers make their monthly payments to mortgage servicers, and servicers keep a portion of the payment as their profit while sending the rest to the Wall Street investors who actually own the mortgage.” This law requires servicers to act in the best interest of all their investors and obligates them to modify your loan if you can afford the modified loan terms and if they are likely to recover more for their investors by working with you than by going all the way through the foreclosure process,” Nicholas said.
When negotiating a loan modification with your mortgage lender, it is advisable to follow this four step process:
1. Make sure you are dealing with your lender’s loss mitigation and/or work out department.
2. Write a hardship letter demonstrating job loss, serious medical condition, balloon payment coming due, adjustable rate reset or some other financial calamity that will make it impossible for you to continue making your mortgage payments as scheduled. Unless you are in imminent danger of default as required by this new law, lenders are not likely to work with you.
3. Send the lender your financial statements, employment records, tax returns and bank statements demonstrating how you would be able to afford the modified loan terms under your present financial circumstances.
4. Send the lender a current appraisal of your home or some documentation on recent comparable sales in your neighborhood demonstrating the current value of your home. “The key is to demonstrate how the lender is likely to recover less money through foreclosure than they would by working with you in your proposed loan modification plan,” Nicholas said.
It may be advisable to consult with your attorney- especially if you qualify for a loan modification under the law and your lender still refuses to work with you.
Monday, October 13, 2008
Foreclosure Crisis Creates an Opportunity for Reassessment
Not only is it the perfect time to reassess your income, expenses, cash reserves and investment portfolio, the economic crisis has created a great opportunity to lower your property taxes by contesting your recent tax assessment. The BluePrint for Financial Prosperity blog outlines the following tips:
Build a case for a lower property assessment and do it quickly: Most places have a time limit for an appeal, Money says 60 days it the norm but I’ve seen places with 45 days and 90 days. Your case will be based on how your county assesses home value. If they use comparables, get some comparables and use them as ammunition (get 5-10, more is better).
Meet with the assessor first, then file an appeal: If you can convince the assessor that he or she assessed your home higher than he or she should have, it’ll help your case when it comes time to appear before the review board because they’ll be there. If you convince them, they’ll put up less of a fight. At the appeal board, prepare an 8-10 minute presentation with pictures of the comparables and a spreadsheet of the data. Think about what you would want to see if you were on the board. If you’ve done your homework, act professionally, then you have a good shot.
For more information, read the full blog post here! Great data (and more in the Money article referenced)... take action on it immediately!
Build a case for a lower property assessment and do it quickly: Most places have a time limit for an appeal, Money says 60 days it the norm but I’ve seen places with 45 days and 90 days. Your case will be based on how your county assesses home value. If they use comparables, get some comparables and use them as ammunition (get 5-10, more is better).
Meet with the assessor first, then file an appeal: If you can convince the assessor that he or she assessed your home higher than he or she should have, it’ll help your case when it comes time to appear before the review board because they’ll be there. If you convince them, they’ll put up less of a fight. At the appeal board, prepare an 8-10 minute presentation with pictures of the comparables and a spreadsheet of the data. Think about what you would want to see if you were on the board. If you’ve done your homework, act professionally, then you have a good shot.
For more information, read the full blog post here! Great data (and more in the Money article referenced)... take action on it immediately!
Monday, September 8, 2008
Fannie, Freddie, and You: How the Bailout Impacts Main Street
If you weren’t facing foreclosure last week, you could be in danger now.
The news media is hailing the bailout as the savior of the economy. But let me ask the question that no one else seems to be asking... WHERE IS THE MONEY COMING FROM?
The recent government bailout of Fannie Mae and Freddie Mac is not designed to protect the homeowner, but to support Mortgage-Backed Securities by pledging public dollars. In plain language, the government's plan is to use taxpayer's money to support the damaged mortgage giants, and will sell MBS's on the open market to the highest bidder.
What impact could this have on your wallet? Potentially, a high impact.
In my opinion, taxes WILL have to increase to cover this move. If the housing market continues to decline, this could mean tens of millions of dollars to John Q. Homeowner – money that is already stretched to the limit by increased food costs, rising gas prices, and declining house values.
Now more than ever, homeowners need to accurately assess their financial situation. Here are four things you can do immediately:
1. Face your finances: Accurately assess what economic conditions are doing to your bank account. Take a deep look at what you're earning, spending, and saving and how to adjust those numbers so you can save more for future incidents.
2. Get a new tax assessment: A decrease in neighborhood real estate values can result in tax savings for you. Review your last tax assessment and go to your county to dispute the results. An adjustment could save you hundreds - even thousands - per year.
3. Review ALL options, not just the obvious ones: Look for creative solutions to a cash-crunch. Can you rent out a portion of your house? Should you consider selling your home and moving into a high-end mobile home? Can you sell your car and travel via public transportation? Think of these ideas and more to save funds and decrease expenses.
4. Get a fixed-rate loan: Locking in a rate now can save you from future worry. If you can qualify for a fixed-rate loan under the new FHA program, do it now!
Do not wait until taxes increase to take action... implement proactive solutions immediately!
The news media is hailing the bailout as the savior of the economy. But let me ask the question that no one else seems to be asking... WHERE IS THE MONEY COMING FROM?
The recent government bailout of Fannie Mae and Freddie Mac is not designed to protect the homeowner, but to support Mortgage-Backed Securities by pledging public dollars. In plain language, the government's plan is to use taxpayer's money to support the damaged mortgage giants, and will sell MBS's on the open market to the highest bidder.
What impact could this have on your wallet? Potentially, a high impact.
In my opinion, taxes WILL have to increase to cover this move. If the housing market continues to decline, this could mean tens of millions of dollars to John Q. Homeowner – money that is already stretched to the limit by increased food costs, rising gas prices, and declining house values.
Now more than ever, homeowners need to accurately assess their financial situation. Here are four things you can do immediately:
1. Face your finances: Accurately assess what economic conditions are doing to your bank account. Take a deep look at what you're earning, spending, and saving and how to adjust those numbers so you can save more for future incidents.
2. Get a new tax assessment: A decrease in neighborhood real estate values can result in tax savings for you. Review your last tax assessment and go to your county to dispute the results. An adjustment could save you hundreds - even thousands - per year.
3. Review ALL options, not just the obvious ones: Look for creative solutions to a cash-crunch. Can you rent out a portion of your house? Should you consider selling your home and moving into a high-end mobile home? Can you sell your car and travel via public transportation? Think of these ideas and more to save funds and decrease expenses.
4. Get a fixed-rate loan: Locking in a rate now can save you from future worry. If you can qualify for a fixed-rate loan under the new FHA program, do it now!
Do not wait until taxes increase to take action... implement proactive solutions immediately!
Friday, August 29, 2008
Foreclosure FAQ: Can I Buy A House After Foreclosure?
A lot of homeowners who have been through foreclosure wonder when they will be able to buy a home again. Let me say it's not an easy task, but not impossible.
The first thing to consider is that a foreclosure stays on your credit report for 7-10 years. However, lenders usually look at the last three years of credit when considering a mortgage approval. It is important to start planning your credit rebuild immediately to pad the foundation of your financial picture. Start with a secured credit card, on which you only spend and pay off 30% of the allowed credit limit each month. Next, get an apartment and stay there for two years. Pay your rent on time EVERY month and use the favorable review from the landlord as a good credit reference.
The second thing to think about is your down payment. It will be critical to put down as much money possible if you want to go towards the traditional mortgage route. Since the foreclosure is going to be a consideration factor, start saving for a 20% down payment.
Next, be CONSERVATIVE when it comes to choosing your next property! The Taj Mahal will not be in your budget... talk with a Realtor to realistically plan how much house you can afford, and then consider looking at houses BELOW that threshold.
The most important thing is to plan your finances and be disciplined with your spending and saving goals. You can rebuild your life... it just takes practice and focus.
Good luck!
The first thing to consider is that a foreclosure stays on your credit report for 7-10 years. However, lenders usually look at the last three years of credit when considering a mortgage approval. It is important to start planning your credit rebuild immediately to pad the foundation of your financial picture. Start with a secured credit card, on which you only spend and pay off 30% of the allowed credit limit each month. Next, get an apartment and stay there for two years. Pay your rent on time EVERY month and use the favorable review from the landlord as a good credit reference.
The second thing to think about is your down payment. It will be critical to put down as much money possible if you want to go towards the traditional mortgage route. Since the foreclosure is going to be a consideration factor, start saving for a 20% down payment.
Next, be CONSERVATIVE when it comes to choosing your next property! The Taj Mahal will not be in your budget... talk with a Realtor to realistically plan how much house you can afford, and then consider looking at houses BELOW that threshold.
The most important thing is to plan your finances and be disciplined with your spending and saving goals. You can rebuild your life... it just takes practice and focus.
Good luck!
Wednesday, July 30, 2008
Buyer Beware! 7 Consumer Tips When Purchasing a Foreclosure Property
Many people think they are getting a steal when buying a foreclosed property. This isn't always the case, and prospective buyers should weigh the pros and cons, especially if they are considering the purchase as a primary residence. Here are 7 tips buyers should be aware of to avoid the possible pitfalls.
1. Foreclosure protection laws. Certain states have laws against buyers contacting a pre-foreclosure homeowner directly. There would be a need for a middleman to ensure a seller’s rights have been fully explained and documented. Ensure that you are working within the state’s law if you are considering contacting homeowners directly to purchase a property.
2. Damage and repairs. When buying a foreclosure, you are often buying a property in “as-is” condition. In addition to the normal maintenance that is sometimes necessary, some property owners are less than pleased when they lose their homes and decide to take their anger out on the house before they vacate. When buying a foreclosure property, budget generously for damage and necessary repairs to the property.
3. Redemption periods. Many states have a period of time after a foreclosure auction in which a foreclosed homeowner can reclaim their property. In these jurisdictions, if the previous owner pays the back the total amount of fees and payments within an allotted timeframe, they regain the rights to the property. If you are considering buying a foreclosure – especially for living purposes – check your state’s foreclosure redemption regulations.
4. Neighborhood values. A foreclosure property may look like a great deal, but not if the property values in the neighborhood are still on the decline. If you buy a house before the prices have bottomed out, you may be starting out with negative equity. Make sure you are buying a property where the community values are on the upswing.
5. Unpaid utility bills. Many homeowners stop paying their utility bills when they cease making mortgage payments. These bills may carry over after you have purchased a property – keep documented records in case you need to provide proof of the transfer of ownership to utility companies.
6. Review household contracts. Does the property you are buying have a security system? How about a landscaping service? Are the appliances under a home warranty? These may be a few of the contracts that need to be transferred or reviewed on your new property. Again, the documents you have that prove ownership transfer may assist you in conversations with these service companies.
7. Unwanted visitors. Counties are reporting increased instances of vandalism and squatters in vacant foreclosed properties. Ask the neighbors if they have seen any new and illegal activity. Before you move in, check with the local police to get crime reports for the area. In addition, ask them to do a drive by of your property.
1. Foreclosure protection laws. Certain states have laws against buyers contacting a pre-foreclosure homeowner directly. There would be a need for a middleman to ensure a seller’s rights have been fully explained and documented. Ensure that you are working within the state’s law if you are considering contacting homeowners directly to purchase a property.
2. Damage and repairs. When buying a foreclosure, you are often buying a property in “as-is” condition. In addition to the normal maintenance that is sometimes necessary, some property owners are less than pleased when they lose their homes and decide to take their anger out on the house before they vacate. When buying a foreclosure property, budget generously for damage and necessary repairs to the property.
3. Redemption periods. Many states have a period of time after a foreclosure auction in which a foreclosed homeowner can reclaim their property. In these jurisdictions, if the previous owner pays the back the total amount of fees and payments within an allotted timeframe, they regain the rights to the property. If you are considering buying a foreclosure – especially for living purposes – check your state’s foreclosure redemption regulations.
4. Neighborhood values. A foreclosure property may look like a great deal, but not if the property values in the neighborhood are still on the decline. If you buy a house before the prices have bottomed out, you may be starting out with negative equity. Make sure you are buying a property where the community values are on the upswing.
5. Unpaid utility bills. Many homeowners stop paying their utility bills when they cease making mortgage payments. These bills may carry over after you have purchased a property – keep documented records in case you need to provide proof of the transfer of ownership to utility companies.
6. Review household contracts. Does the property you are buying have a security system? How about a landscaping service? Are the appliances under a home warranty? These may be a few of the contracts that need to be transferred or reviewed on your new property. Again, the documents you have that prove ownership transfer may assist you in conversations with these service companies.
7. Unwanted visitors. Counties are reporting increased instances of vandalism and squatters in vacant foreclosed properties. Ask the neighbors if they have seen any new and illegal activity. Before you move in, check with the local police to get crime reports for the area. In addition, ask them to do a drive by of your property.
Wednesday, July 16, 2008
7 Tips for Avoiding Foreclosure
1. Budget conservatively. Even you hate the “B” word, it is important to apply a budget to your household finances. Creating a conservative financial plan that allows for a sufficient savings cushion, expense allowance, and a bit of spending money will create a foundation that stands up to emergencies.
2. Find ways to increase your income. Increasing your income stream helps to augment your monthly budget. Think about starting a part-time job or a small business to earn extra cash. If you cannot trade time for money, consider renting out a room or look through old items to sell on eBay.
3. Explore ways to decrease your expenses. Cutting your expenses is critical to stretching your funds. Try telecommuting 2-3 days per week, using public transportation, or carpooling to save gas money. In fact, have you considered selling your car outright or downsizing your automobile to save cash?
4. Watch your credit card debt. Credit card debt is crippling the American homeowner with each minimum monthly payment. Minimize the amount of purchases you make on credit and increase your cash purchases. Move towards a plan where you keep one card for emergencies only, and limit the spending to thirty percent of the credit limit.
5. Opt for a Fixed Rate over an Adjustable Rate mortgage. A fixed rate mortgage allows you to plan for the long term. If you are just beginning to budget, having your house payments remain the same over the long term increases the probability of remaining on track. If you have an adjustable rate mortgage, ensure that you project early and accordingly for the financial adjustment.
6. Save 10% of your income. The key to successful financial planning is to pay yourself first. With every paycheck, divert ten percent of your pre-tax funds to a savings or money market account. This is the way to ensure you are building financial security automatically – don’t make it a secondary action.
7. Don’t buy too much house. The first rule of purchasing a home is to buy smart. The easiest way to derail your financial future is to buy more house than you can afford – trying to keep up with the payments while juggling additional financial responsibilities is a losing battle. Purchase a property where the total monthly expense equals less than 40% of your income.
2. Find ways to increase your income. Increasing your income stream helps to augment your monthly budget. Think about starting a part-time job or a small business to earn extra cash. If you cannot trade time for money, consider renting out a room or look through old items to sell on eBay.
3. Explore ways to decrease your expenses. Cutting your expenses is critical to stretching your funds. Try telecommuting 2-3 days per week, using public transportation, or carpooling to save gas money. In fact, have you considered selling your car outright or downsizing your automobile to save cash?
4. Watch your credit card debt. Credit card debt is crippling the American homeowner with each minimum monthly payment. Minimize the amount of purchases you make on credit and increase your cash purchases. Move towards a plan where you keep one card for emergencies only, and limit the spending to thirty percent of the credit limit.
5. Opt for a Fixed Rate over an Adjustable Rate mortgage. A fixed rate mortgage allows you to plan for the long term. If you are just beginning to budget, having your house payments remain the same over the long term increases the probability of remaining on track. If you have an adjustable rate mortgage, ensure that you project early and accordingly for the financial adjustment.
6. Save 10% of your income. The key to successful financial planning is to pay yourself first. With every paycheck, divert ten percent of your pre-tax funds to a savings or money market account. This is the way to ensure you are building financial security automatically – don’t make it a secondary action.
7. Don’t buy too much house. The first rule of purchasing a home is to buy smart. The easiest way to derail your financial future is to buy more house than you can afford – trying to keep up with the payments while juggling additional financial responsibilities is a losing battle. Purchase a property where the total monthly expense equals less than 40% of your income.
Subscribe to:
Posts (Atom)
