How to Survive the Mortgage Crisis

Thank you, Jeremy Strahm with Woodland Mortgage Partners, for providing the following blog! If you would like to obtain a new mortgage, refinance or have questions about forclosure you can reach Jeremy at 317-402-1173 or jeremy@woodlandmortgagepartners.com.

The current mortgage crisis is creating some horrific history; but you don't have to become one of the depressing statistics. Protect yourself from financial calamity by understanding your mortgage, being honest with your lender, and respecting your budgetary limitations.

While the root cause of the current credit crisis and housing turmoil can be traced to a wide variety of factors-including some predatory lending practices-hindsight is always sharper than foresight. In order to act now to guard yourself from the looming threat of this mortgage chaos, it's imperative that you first get to know your home loan so that you can make appropriate financial decisions.

Tips for home mortgage protection

Here are some ways to protect yourself:

• If you have an adjustable rate mortgage, strongly consider refinancing out of it into a safer and more dependable fixed-rate variety. Otherwise, rates could spike and leave you with an unwieldy monthly payment.
• Paying interest only is extremely risky, because you can make payments for years without effectively reducing your overall mortgage debt. Avoid interest-only or negative amortization loans like the plague during this current real estate climate.
• If you're facing foreclosure, seek out professional financial guidance from your lender or from a credit counseling agency. Lenders are eager to avoid defaults, and may be willing to work out new mortgage terms to help you weather the storm.
• Your current lender may penalize you for paying off your mortgage early, so before you refinance, check the small print on your loan documents. If necessary, ask your lender to waive that requirement. Some consumers have succeeded in getting those penalties removed, so challenging them is well worth the effort.