On Sunday's show we discussed the current market conditions on foreclosures, equity lines and adjustable rate mortgages. My guest on the show was Kenneth Lewis, CEO of Lewis Realty in Vallejo, CA. He gave us advice on how to deal the changes in mortgages payments and also the fear, denial and shame of dealing with foreclosures.
We discussed the importance of dealing with the issue and not allowing it to go unnoticed. Some of the points provided were:
1. Avoid Denial, talk to your mate or partner about your current situation. Often individuals will avoid each other and go unconscious and think that the situation will heal itself. If you don't pay your VISA bill they will close our account. If you don't pay your mortgage, they have a right to foreclose on your home. Life is not over you can be proactive and you can begin again.
2. Do a financial check up. Sit down and determine what your expenses are and what your income is. When your expenses exceed your income you have a problem. No mystery here. If you know that you have an equity line (what most think is an open check book) or adjustable rate mortgage you are a candidate for interest rate increases.
3. If you have an equity line, get rid of it! You can refinance it or refinance the 1st and 2nd mortgage if you have enough equity. equity lines are hitting hard, they are condition usually on the prime rate. When the prime rate goes up your equity line goes up. Only individuals who have used some of the money are affected. If you have no balance and have an equity line for emergencies, business or on an as needed basis you may not be affected if you pay off the balance immediately.
Check out the link above for great info from financial experts on how to manage your mortgage increase. The article provides you with practical suggestions on what to do if your mortgage has increased by $100 - $400.