I’m Upside Down On My House, What Do I do Now? By Karen Schimpf
Centennial, CO -- (ReleaseWire) -- 04/08/2009 -- The refinancing explosion has passed, and the lucrative real estate business has faltered. Presently, more than 30 million Americans are experiencing a reduction in equity in their homes, and are completely upside-down in their mortgages.
In New York City, Arizona, Washington, D.C., California and Florida, where the real estate industry was booming, it is now struggling to find buyers, let alone any prospects. Sales are plummeting in some markets that were positively booming before. The drop in home prices has been substantial in Florida, and has become the hinge on which the rest of the real estate crash has swung.
When prices falter as they have done as of late, it creates a problem. The value of real estate has dropped throughout the entire country. Properties that have been purchased may well now be valued at 75% of what they were at the time purchase, so unless the owner has a full 25% equity in their home, they owe more on their mortgage than the house is worth and are, as we say, upside-down. But being upside-down certainly isn't necessarily the end of the world, as long as you can maintain your mortgage payments. Simply stay the course, and eventually the housing market will rebound.
But what happens when you can’t make your payments? If you quit making payments, your credit will suffer and you will be in no place to make use of decreasing interest rates when interest rates fall because you will be upside down in your home with poor credit. At this point you need to refinance, but who will lend you money with no equity and poor credit?
The answer to this may very well be a loan modification.
With the chances of refinancing getting slimmer and slimmer, borrowers and lenders have the task of repairing the millions of faulty loans that have been established. This is the new, big thing going on in the mortgage industry. In a nutshell, these lenders are now having to go back and change the terms and conditions of the loan to match today’s flailing market. This recent mortgage crisis has left both borrowers and lenders attempting to negotiate new terms to fix the mistakes in lending that have been made.
A loan modification does not require an appraisal, a clean credit history, or any equity. All that is required is proof that you can no longer manage your present mortgage. Whether you got behind because of life circumstances (divorce, loss of job, illness), or your adjustable rate continues to adjust upward, all you need is the know-how and persistence to get into some loan modification. Call my office today and let’s see how we can work together to help you save your home.
Karen Schimpf is a nationally recognized expert specializing in bringing new solutions to homeowners. Karen has also helped release hundreds of Americans from the “credit prison” that too many people find themselves in. If you find yourself “payment pinched” or when you or one of your friends finds yourself needing real answers and real solutions to credit issues, you can confidentially contact her at 303-400-8630 or at http://coloradomortgagetips.com/loanmod.htm
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