The American Dream has always been to own your own home. Think of it! Free of rental payments going to someone and you gaining no equity in the property. It’s frustrating.
So frustrating that many people made the jump from renters to homeowners just two years ago when the market was attractive. Take the couple in California who, tired of renting, told their kids that if they skip vacations and eating out so often, they could afford a new home.
But the price was a killer even then. At $567,000, they needed to get into a loan that would allow them to ease into the high payments. They didn’t have much money for a down payment and chose an adjustable rate mortgage, meaning they would have a few years of low payments. Just what they wanted, they thought.
Their mortgage broker told them not to worry. In two years they could easily refinance and keep the rate down.
But now, it’s almost impossible to get refinanced if you have little money and little credit. The banks and mortgage companies are no longer loaning to people who are a high credit risk. So the couple in California are caught in a trap.
What’s worse is that brokers in the area tell them homes like theirs are fetching only $535,000. This means that the balance on their loan exceeds their home value.
Hundreds of thousands of people will be caught in this same trap. All thought the boom in housing prices would continue. What they did was jump into homeownership at a time when credit was easy, instead of waiting until they could someday afford payments. But lenders are now enforcing stricter standards and not extending credit to these people.
They will not lend because they have no collateral, no equity in their house, and generally upside down on their loans. This is no longer a rare situation. That cushion of home equity keeps you from losing your home when you lose your job, have a critical illness, or your payments skyrocket like the couple in California.
What you should do is scope out your situation and see if you have anything close to what is stated here. If so, the recommendation is to begin to seek out a foreclosure lawyer. These attorneys can help you and generally do not charge you anything unless they can save your home. You can get more information from http://www.abbey-properties.com