Heading Towards Foreclosure and Don’t Know it yet?
Loading ...There are a lot of things happening in the mortgage business everyday, from guideline and product changes, to banks going flat out of business. There are people who are purchasing homes and have been pre qualified with a bank that might be out of business when they finally find the home they choose to purchase (happened to my clients but don’t worry I lined them up with new financing quickly and I closed the transaction just a few days later).
The title of this post might be an eye cather. THat’s what it was meant to do. The people who really have the possibility to get in trouble is not necessarily the people I mentioned above, but it’s the people who already own homes and have loans that aren’t your standard vanilla 30 year fixed. You see a lot of people out there have loans that are fixed for just 2 short years, maybe 3 that are going to have to refinance into a new fixed loan when their short fixed term expires. Once the short fixed term expires, that payment will adjust and let me tell you, the payment will not adjust downward, it will most surely increase at which point it will become more and more difficult to hold on to that home. The problem lies in the fact that since loan guidelines have been so drastically tightened, there is a chance that you may not qualify to refinance into a fixed loan which would effectively make you STUCK with an adjusting payment until easier financing comes along. I’ve talked with people in Riverside, Moreno Valley, Beaumont, Banning, and Corona that are in this situation. It’s something that we are going to see a lot of because a lot of people have short term fixed loans.
Then there are people today who have loans that are 5 year fixed loans.  The fixed term isn’t going to expire for say another 2.5 years.  If they don’t refinance now, they may be heading towards an inevitable foreclosure in 2.5 years and not even know it.  Folks the way things are now, we don’t know what financing will be available in 2.5 years.  We don’t know what home values in your neighborhood are going to be.  If you are in a new area and purchased at the height of the market it’s a very real possibility that you will owe more than your house is worth making a refi an impossibility.  With payments adjusting higher, you might not be able to afford that house. 
It’s important to evaluate your situation and my advice to you is to refi into a normal 30 year fixed loan now. Get the security of a traditional fixed loan now because there is simply too much uncertainty in the market place today to think that just because you have 2 more years of a fixed term that you’ll be able to refinance into a new fixed loan then, because a lot of the creative financing products that you may have used to qualify might not return for awhile. And if that happens you’ll be stuck holding onto a rising mortgage payment that just might rise too high for you and your family to keep holding on to. FIX YOUR LOAN NOW. 
More: continued here
Comments
Got something to say?
Loan Calculator
 | ||
 | ||
 | ||
