Times have changed in the housing, but most experts agree that if you can afford it, buying a home is a great investment. Still, with so much talk about foreclosures in the media, you might be wondering how to make sure the loan you choose is right for you.
Don’t worry. Despite recent media reports, experts say most home loan defaults result from life circumstance changes such as a significant adjustment of income from a job loss, health problems, marital changes or a death in the family. Bad loans amount for a small percentage, 1% according to some lenders, of problems.
• Still, here are a few things to consider when evaluating a home loan.
• Make sure you understand all the terms of your loan. Ask if and when the payment could increase and by how much. Find out about prepayment penalties, balloon payments due at the end of the loan, fees, increases in monthly payments tax and insurance implications related to the loan.
• Don’t overextend yourself financially. Make sure you can afford the loan.
• Keep a prudent reserve of funds for additional expenses such as unforeseen home repair costs, insurance and taxes.
If you have a financial change that requires attention, talk to your lender first or the lender’s loan mitigation department.
A notice of default is a public document and can be recorded by a lender when the debt is as little as 30 days late, making many borrowers subject to scams that range from people offering to talk to the lender for a fee paid upfront, of course – to scammers who encourage the owner to put the property in the scammer’s name as part of a lease and buy-back program that can result in the owner losing all rights to the home.
Even if your problems are temporary, let your lender know what is happening.
If you have questions about financing a home or concerns about your current loan, HomeLoan123.com is ready to help.
Keeping you informed.
Doctor Mortgage
To ask HomeLoan123.com’s Doctor Mortgage a question, e-mail: info@homeloan123.com
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