Home is where the heart ? and the monthly mortgage payment ? is.
As the housing market keeps hovering around what many experts are calling a buyers? market, more and more consumers are jumping into real estate. Unfortunately, properties in Baltimore City and its surrounding counties are still holding at around $315,500, according to the latest Metropolitan Regional Information Statistics. This means that getting into the real estate market without proper assistance and guidance could very well spell trouble ? as in foreclosure.
“What it comes back to is not understanding your own financial situation,” said Thomas Shaner, executive director of the Maryland Association of Mortgage Brokers. “Ultimately, you are buying too much house for what you can afford.”
Many people are bypassing banks for loans, utilizing the services of mortgage brokers, who provide more individualized care and can help search for a situation that fits a potential buyer. However, though brokers fill the role of an informed and connected middleman to help secure loans and propose potential funding options, they arenot always immune or above influence from certain lenders.
In a 2006 report by The National Association of Realtors, about 43 percent of first-time home buyers purchased their home with no down payment, and of those who did make a down payment, more than 50 percent put down only 2 percent or less of the home?s cost.
Perhaps the toughest part of being a homeowner is knowing when to ask for help. According to Data Study numbers, about 4.5 percent of the 129,272 subprime mortgage loans in Maryland are currently in serious delinquency (more than 90 days), with people being threatened with losing their homes.
U.S. Department of Housing and Urban Development has offered many tips to people who have a loan insured by the Federal Housing Administration and are struggling to make payments. These tips also apply to regular mortgage owners.
Most importantly, never ignore letters from your lender. Many times lenders will work with you to refinance. Delinquency for you can mean a loss for them. Secondly, never abandon your property; this can disqualify you for certain types of assistance.
Other alternatives to foreclosure include redesigned loan programs, a mortgage modification to refinance the debt back into the initial loan or the possibility of a pre-foreclosure sale, where your credit rating is saved at the cost of the balance of your mortgage.
“We all support the American dream, but the reality is, not everyone is prepared to own the home,” Shaner said.
