Is Your Home Still Affordable?
Not so many years ago, it seemed like money was readily available for new homes, the prices were going to continue to rise forever, and our families and future financial security was assured; how wrong were we?
The prices of houses reached a level that was unsustainable, and that’s one of the reasons that worldwide economies tumbled the way that they did. As more people felt the effects of a failing economy, and many lost their jobs, it meant that unrealistic repayments on homes, that they could barely afford in the first place, became too much. Foreclosure on mortgages that were in arrears became a more common event, and that only dragged the economy further down with it. So a plan was hatched back in 2009 to help people keep their homes through a home loan modification program.
Before that you had one of two options, you tried to find a way to get more money coming into the home, so as to keep up the payments on the mortgage, or, as most people found out, you struggle on as best as you can, fall behind in what you owe, and they still take your home. Oddly enough though, foreclosure on mortgages, due to the payments being more than a few months in arrears, wasn’t always the preferred option of the banks, either. Just think about it for a moment.
Most banks were lending based on the expected resale value of your home, which virtually vanished over night. They were no longer being paid the interest that they take before any substantial amount of the mortgage was paid, and, they were left with houses that would either not sell, or would be worth a fraction of the cost that the buyers had lent against to get them. So, although it may not always have seemed it, the lenders were just as anxious to keep the ‘homeowners’ living in their houses as the owners were to live there.
Some lenders would negotiate a loan modification, but others were so scared of what was happening that they started to panic, and foreclose. OK, that makes it sound as though not all of this was their fault, when clearly they were lending to people who could not reasonably afford their repayments, but it wasn’t all about an evil corporation who were eager to get your home, and have you thrown out into the streets.
Of course, through HAMP, things have started to ease for those people who qualify to have a home loan modification program put in place. The way that this program is going to help you is to allow you to negotiate a much lower rate of interest to be repaid. As mentioned before, the majority of the payments that you will be paying to a lender in the first few years of a mortgage, are going to be interest anyway, so this will not only save you some money each month, your payments should be (largely) going towards paying back the actual cost of your home, not the interest.
Maybe you don’t have quite the same problem as the people who are on the verge of losing their homes, and you just need a little leeway so that you can get your finances put in order, and then start paying the mortgage again. If that is the case, and you qualify for a payment holiday, then you can find the time that you need, before starting to make regular mortgage repayments again.
Where can you find out more about whether you qualify for a reduction, or holiday, and how you can get the ball rolling on it? Head over to www.makehomeaffordableplan.com and check out your eligibility today. You never know, in a few minutes from now, you may have some of the stress that you have been feeling lifted; isn’t it worth a few more minutes of your time?
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