Being able to turn a key in a lock that nobody other than your family has access to. Relaxing and reading a book in the hammock in the peace of your own backyard. Painting the walls whatever color scheme you wish. These are some of the things that go hand in hand with home ownership that can seem attractive to anyone. Getting swept up in the excitement of owning a home is an easy thing to do. What happens when there is a financial hardship, though?
One of the first things that you can do when you find yourself in a financial bind is to take a look at your mortgage. Believe it or not, you might be able to apply for a modification of the loan. If you have paid at least 20% of it, you might be able to drop the private mortgage insurance and this could lower your payments. If the value of property in the area of your home has decreased, thereby decreasing the value of your own home, you might be able to get lower payments. If interest rates have changed, you might be able to refinance to take advantage of those lower rates. There are so many little things that can make a big difference when it comes to your mortgage that it really is worth taking the time to determine if refinancing can help to get you through your financial issues.
Anytime you have financial issues, attempting to locate the money to make sure all of the bills get paid can be beyond frustrating. When you are facing foreclosure, it can get even harder. However, it might make you feel a little bit better to know that this is something that you don’t have to do all by your lonesome. HUD – the US Department of Housing and Urban Development – has made available a list of foreclosure avoidance counseling services that are nonprofit and can advise you when it comes to things like the foreclosure laws in your state. They can let you know what all of your options are and assist you in getting all of the necessary paperwork together. They can even be there to negotiate terms with your lender. Best of all? These are all free services.
Being foreclosed on will not ensure that you have bad credit for the rest of your life. That said, your credit will take a significant hit and it might even preclude you from getting another mortgage for many years to come. New laws though, say that you will have the chance to get an FHA loan in as little as a year after you have been foreclosed on if you meet certain requirements. Either way, you need to make some repairs to your credit. You can do this by making sure that you pay your bills on time. You can also take a look at your credit report and make sure that there are no discrepancies. If there are, you need to get them corrected as soon as possible. Repairing your credit can take a bit of time, but it is something that is imperative as having bad credit can even have an effect on whether you are able to get a job or not.
Maintenance and Repairs
Most people know that they will have to spend at least a bit of money on home maintenance and repairs. They just might not have any idea of just how much that can add up to. How much is your home worth? If it is $200,000, you might spend as much as $2000 to $8000 EACH YEAR on maintenance and repairs. That’s right, you can expect for these things to cost anywhere from 1 – 4% of the value of the home on a yearly basis. Because of this, one great financial tip for home owners is to have an emergency savings fund. This will give you the cash you need to make any needed repairs. It is always better to be prepared with a bit of savings before disaster strikes than to have something happen and you are unable to pay the bills. Also, don’t ignore small problems. If you see that something needs to be fixed, you need to go ahead and fix it before it becomes a major issue.