RealtyTrac Inc. reports 1.3 million properties in the United States were subject to foreclosure during 2007. This is a whopping 79 percent increase from 2006. The real estate bubble, subprime lending and predatory loans have triggered a major financial and mortgage crisis felt the entire world over. So is there anything we can do to cope with the financial tsunami we are experiencing right now?
I’d like to share some ideas for keeping our heads about water. I believe that with prudent spending and careful money management, we can emerge from this tough financial period whole!
4 Ways To Weather The Financial and Mortgage Crisis
1. Prioritize on your mortgage or rent.
Pay your monthly mortgage or rent before you pay any other bills. Once your mortgage is taken care of, make sure you have electricity, utility and groceries covered for the month. Next come less critical utilities such as television, phone and internet services. After your housing and utility costs are paid, make sure insurance premiums are paid for to cover the assets you have. Finally pay your unsecured, personal debt such as credit cards and auto loans. Your credit standing may be significantly affected if you are unable to pay off bills, but as a priority, you’ll want a roof over your head. So make sure that your mortgage or rent is given the utmost priority.
2. Spend less!
It’s not a great idea to go on shopping sprees at this time. Definitely watch your budget and keep an eye on your expenses. In order to avoid getting into further debt, you’ll want to curtail your unnecessary spending, at least while the recession is ongoing and there’s always that risk of job loss around the corner. These days, I no longer eat out or go to the theaters much. I can’t remember the last movie I watched outside of my home! It’s also important to watch your credit standing and to try to pay down your most basic expenses first. If need be, raise some extra money by selling the clutter around your home.
3. Communicate with your bank or mortgage company.
Your bank or mortgage company doesn’t want another foreclosure in their hands, so it’s in their best interest to support you. By communicating with your mortgage lender, you may be able to work out a more comfortable payment schedule — something you can manage more easily. For example, your lender may be able to give you some months off your payment schedule, or extend the life of your loan. They may be able to give you a more affordable interest rate if you commit to paying your mortgage regularly. Do your best to address any financial problems early in order to avoid any negative effects on your credit rating and to avoid the escalation of your situation into possible foreclosure or bankruptcy. Often mortgage companies are so overwhelmed that they may not attend to your issues until you’re actually late with payments. Don’t let that stop you from getting your problem on the record from the beginning.
4. Fight predatory lending by reporting problem lenders.
I know some people who’ve been victims of predatory lending, and falling into this situation is not pretty. In their case, they fell on hard times due to a health crisis in the family . They then tried to refinance their home and consolidate their debt in order to pay off their high interest credit cards. Unfortunately, this new debt was still insufficient for covering some payments on certain cards — their new loan was not optimal for their needs. This loan arrangement was something they suspected to be predatory, so they threatened legal action against their mortgage company unless their concerns were addressed. The good news? The company listened and offered them a reimbursement check for part of their loan’s closing costs. If you find yourself a victim of predatory lending, contact this site for assistance.
Hopefully these tips can offer you some solace during this economic downturn. There are ways to weather the mortgage crisis, so don’t be afraid to take the necessary steps to ensure your financial health during this time!