We are having trouble making our payments!

We are having a hard time making our payments … what can we do?

You’re not alone if you are having trouble paying your mortgage. The housing boom took homeownership to nearly 70%, but some homeowners are having problems making their payments and they can’t refinance. Lenders invented new types of mortgages recently to help families without cash for a down payment, or with less-than-perfect credit. These “subprime” loans have higher interest rates and costs such as prepayment penalties (usually six months interest minimum!). They often start with a “teaser” rate followed by significant increases over the remainder of the loan.

Compounded by the Market correcting, the situation has caused many to be in the predicament of facing much higher payments, high cost to refinance or sell, and market values that would require them to write a check to sell their property. If you are having trouble paying your mortgage for any reason, or expect problems, you should work with experts and your lender to find a solution. If you fall behind and don’t take action, the lender will foreclose on your home. The sooner you act, the better the chances you will avoid foreclosure.

If you have, or are considering getting, one of the following types of loans be advised that they have a particularly high risk of failure: Interest-Only Mortgage – you pay only the interest on the loan for the first 5-10 years, nothing on the loan amount. After the interest-only period the payments are much higher. Payment Option Adjustable Rate Mortgages – you decide how much to pay each month. You can pay less than the interest and add the unpaid interest to the principal you owe, or you can pay just interest, or you can pay enough to pay the loan off sooner. This can have a big payment shock, and get you “upside down” in your property quickly. 2/28 and 3/27 Mortgages – you’ll have a fixed payment for the first two or three years before your payments adjust.

Our Advice: There are options for working with your lender that can prevent a foreclosure. If your payment is squeezing you we suggest that you get counseling immediately. Be careful of questionable counseling companies that want a fee and “will hire an attorney” for you. There are non-profit Neighbor Works organizations working with the Homeownership Preservation Foundation that can help you. Call 1-888-995-HOPE, day or night (24/7), English or Spanish, to get help. You can find the nearest Neighbor Works organization at www.nw.org. The U.S. Department of Housing and Urban Development (HUD) website has a list of approved counseling organization by state, www.hud.gov/counseling, or call 800-569-4287.

Don’t play ostrich! Take action and control your destiny. Don’t let the pressure build, get a plan and work it. Help is available in more ways than ever before – utilize the resources available to you for your financial, emotional and psychological well being.

When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, carsonvalleyland.com, 775-781- 5472