Saturday, October 13, 2007

My Mortgage:I'll take care of it later.

We often see this with foreclosures or clients that waited too long to refinance. Humans are built to remember the recent past with the greatest clarity. Not withstanding those folks with alzheimer's who live in brighter time in their mind's eye. Maybe homeowners have bubbleheimer's. The bubbleheimers remember the housing boom and falling interest rates. They completely forget the past housing bubbles various areas have experienced let alone the multidecade collapse Japan experienced.

Millions think their houses are worth a kings ransom, that rates will always be the same or less than their current rate, and that financing will always be available on very attractive terms. This is proving all wrong for millions of people. This crosses all income brackets and home values. I have seen multimillion dollar homes serially refinanced till they have little or no equity. When prices are soft, homeowners can't refinance and a sale would result in a check required from the seller to close after real estate commissions and fees. Mr. Smith we need $125k to close the sale of the home you can't afford. Read the blogs to the right if you want a glimpse into individual housing disasters.

With the complex instruments(NEGAMs, ballon loans) that people used to refinance or purchase their homes, procrastination can be the death nail as adjustable loans unlock, property values fall and the homeowners options evaporate. Work with a reputable mortgage professional or contact your favorite realtor to explore your options. Make the decision yourself, don't let the market or the bank make it for you.