Upside-Down in Mortgage - What to Do

In life, a person can never be too certain about things. A person may be a billionaire for the first half of his or her life. But due to unfortunate events like death of loved one, lawsuits, illness and other forms of hardships, life could turn upside down. The once millionaire, who lived life with fame and fortune, can turn out to be a struggling, almost penniless person, who can barely put food on the table.

The example may sound exaggerated but this can happen in the real world. This can even happen in countries, where the economy is not doing well. A high earning individual may lose everything because he or she loses his job. And these things are beyond one's control. The only thing left to do is to try to go back to basic and take things one step at a time until one is able to stand on his or her own feet again.

This is the same concept that you need to apply in mortgage. Everything mentioned is related to this type of loan. A person getting mortgage and seemed so sure that he or she can afford the monthly payment could end up getting into trouble due to hardships in life. Things that are not expected could push you from where you are standing and create a domino effect in your life. In this case, you can lose your home.

But when you are struggling with your mortgage, you can always do something to save your homes. On the other hand, if saving the home seems too blurry, you can always do something to lessen the damage it can bring to your reputation (i.e. Credit report).

Here are some tips to do:

1. Talk to your lender. Let them be aware of your current situation so that they can give you time or grace period for you to come up with the unpaid dues. You can enter in a forbearance agreement with your lender so that they can temporarily suspend or reduce payments for a particular span of time.

2. If the rates seem very expensive, the next thing you can opt for is to loans.blogspot.com/" title="refinance loans">refinance. This time, shop around for the best rates or package that you think is within your capacity to pay.

3. Engage in a short sale. One need not undergo foreclosure to get this as an option. A person just needs to make a request and present a proof of hardship to be granted of short sale. Although this has the same negative impact to your credit report but one can easily buy a house in a few years time. It is way better than foreclosure.

4. Consolidate your debts. This is another tactic to reduce your monthly payments due to lower rates and tax exemptions but the payback time will be longer.

5. Loan Modification is also an option. If you are able to prove your inability to pay the debt back due to uncontrollable factors, then a lender will most likely approve of this.

Source: http://lifeinsurancecalculatorsblog.blogspot.com/2010/08/upside-down-in-mortgage-what-to-do.html

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Building, and affording, a new home

For years, the process to build a new home was simple: hire a builder, apply for a loan and move in. Period.

It's not that easy any longer. Lending institutions have put a clamp on money that used to flow out the door. Appraisals are becoming more of an exact science than an afterthought. Getting the "necessary" value out of a home today to obtain financing has proven more difficult than many people ever remember.

When it comes time to build your home, don't let the "market" scare you away; there are still a number of viable options for you to obtain financing. Most people hire an experienced home builder or general contractor when deciding to build their dream home. There are certain things that you must keep in mind when building a home, some of which are outlined below.

Finding Land / Lot

Finding the right spot to build on can be a daunting task. Many builders have lots available that they will sell you, you can look for undeveloped lots that have flooded the market recently or you can go acquire land that suits your needs. Whatever the case, make sure you consult with your builder and/or architect to make sure that the home you want will fit on the land you're looking at. There is no worse feeling that things not "fitting" together like you'd hope. Finally, consider the purchase price of the land into the final price of your project. There are costs associated with purchasing the land that may play a part in the viability of the project.

Obtaining a Mortgage

Just because you choose to build a home, instead of buying one, doesn't mean you have to seek alternative methods to fund such a purchase. A mortgage is the most traditional method of financing a personal asset, such as a home. Many banks, credit unions, mortgage companies and other lending institutions are available to speak with. Shopping for the package that suits you best will help you discover the lowest rates and payment terms you need.

Making a Down Payment

Just a reminder to keep in mind: many financial institutions will require you to make a down payment on your loan, as a sign of your "devotion" to the project.

Providing your Financial History

Your lender is going to want to know everything about you: your work history, your credit scores, your current debt, your current assets, your payment history, employment records...everything. Be prepared to shell this information out and make it readily available to them.

Paying Property Taxes

Taxes aren't cheap. Finding a lot you love and building the home of your dreams sounds like a great idea, until you get a tax bill that you weren't expecting. Be sure to do researching into what your bill will run each year so you can adequately prepare yourself.

Paying Cash

Very few people can do it, but keep in mind that paying cash for a home will save you a large sum in the long run. As an example, making interest payments on a 5% mortgage for 30 years adds up quickly.

At the end of the day, building a home allows you to get all of the features you desire. Don't rule it out. Many builders are looking for business these days and are willing to make a deal with you. Don't discount your ability to build, finance and afford a new home built just for you.

 

Shea Whitmire is the President of Whitmire Homes, a Georgia custom home builder. The Whitmire family has been building luxury homes for more than 30 years and has a proven track record of helping people find a way to make their dream home a reality. 

Source: http://allmortgagehelp.blogspot.com/2010/08/building-and-affording-new-home.html

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