During these days of financial hardship, many people are becoming very afraid of losing their homes. Where I live, here in Redding, CA, the hospital management terminated over 100 nurses overnight. One of those nurses had been working at the hospital for 28 years. No warning, just a note that said they were no longer needed.
It is this type of sudden loss of work that can create panic and without a new source of salary quickly; homeowners would be hard-pressed to maintain their lifestyles.
When we are under a lot of pressure many times panic set in. Let’s look over just three possible options that may help lesson your stress levels.
1. Seek counsel from a local nonprofit or government organization that can help you understand your rights, local laws, and possible ways to help you avoid foreclosure.
2. Consider the Reverse Mortgage Pros Cons.
3. Call and discuss with your bank what they are willing to do to help you avoid foreclosure.
Nonprofit organizations are in hand to counsel the public and help them learn more about what they can do in times where foreclosure is creeping in. Do not hesitate to take advantage of these nonprofit as well as government organizations.
Financing is one of the many options on people’s minds. Before stepping into this option, ensure that you are aware of current loan prepayment’s conditions in which may be detrimental on your part, as well as any that may be placed on the new loan.
Balloon payments are very enticing because for a few years the monthly payments are low. The reasoning is that within a few years, you can refinance your home to avoid this balloon payment. The problem is this is the very same type of loan that has placed many homeowners in a horrible predicament because of the downturn in the value of their homes.
Studies by researchers in North Carolina University have found that as much as 46% of homeowners taking a loan with a balloon payment end up in foreclosure.
If you currently have equity in your home, consider a reverse mortgage. There are many advantages to a reverse mortgage, especially if you are not going to move for many years to come or you are 62 years of age or older.
One reverse loan type allows you to obtain a line of credit on the equity in your home. This money is not something you will ever have to pay back unless you sell, move out of your home, or in the case of death.
Another option is to call your bank directly and explain your situation. The bank can also offer you several options to help you catch up on your payments, should you be behind. Consider the reverse mortgage advantage. For your personal situation and if you have the advantage, it may be one of your best options.
The best tactic is knowledge of the many options that you have when you are facing serious income losses. Get help from a local nonprofit organization, talk to your bank, and don’t make any quick decisions. Question thoroughly so that you understand exactly what your options are and whether they are advantages for you to accept them or not.
Consider your options. Visit our Financial Options Blog for more information for home owners.
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