Real Estate, financial education and much more.

Blog by PeggyAnn McConnochie

Juneau, Alaska

The perfect place to come to ask questions about real estate education or if looking at improving you skills in order to reach new goals.

Favorite Links

• REALTORS

• Move.com

• ACH Consulting

• Smart Computing

• Real Estate Terms

• Realtor.Com

RealTown Blogs

Blogs Homepage

Featured Entries

Site Feed

RSS Feed

working with homeowners who find themselves in trouble

Posted at Real Estate, financial education and much more. by PeggyAnn McConnochie

Aug. 11, 2007

Categorized in: Your Input

Tagged with: agents, counseling, sellers

I was just interviewed for a segment of a program that will appear tomorrow (08/12/07) morning on FOX News Fox and Friends; the subject, helping home owners who find themselves upside down in regards to their home loan. I was able fairly quickly to go through some basic must dos with the reporter-- the reason? It was not that long ago (mid 1980's) when I was helping clients find ways to get on the right track, when our market went upside down.

It is time we all brush off our skills from the time the market was not as healthy as it has been, or get the skills necessary to help counsel home owners on their options when they start to run into trouble making payments.

Here are the basics I relayed to the reporter:

First - start some serious budgeting…RIGHT NOW. Look at what you spend and where it goes on a monthly basis; everything from the monthly payment to heat and lights, to other utilities and taxes, groceries, education, car payments, incidentals, discretionary purchases etc. What are your balances on your credit cards? Cut back or reduce expenses now. Get rid of credit cards! Banks, mortgage companies, credit card companies not only look at if payments are made on time (on the due date, not within the month they are due); they also note every single time a payment is late (not paid on the date due).
If you are in other than a fixed rate mortgage, find an institution to refinance your mortgage NOW. It is possible if you have high balances on your credit cards that the bank/mortgage companies will want to pay off those balances or at least somehow consolidate them. Fine – credit cards are too easy of a way to get yourself extended – fewer cards are better.
If you cannot dramatically adjust your budget and/or cannot refinance with a mortgage payment that you can live with within your new budget, then you should sell the home and move into another home where you are going to have to rent until you repair your credit rating and obtain enough money for a reasonable down payment for the future. At this point the current and future financial health of the family might only be saved if you get out from under this loan.
If you cannot sell your home after refinancing it, can you rent it out and then move into a smaller property you rent until you are either able to move back into your home or sell it?
From now on: live within the budget, buy only things that you can afford, pay bills on the date due. Pay by cash, not credit cards. Put aside at least 10% of your gross income every month into a savings account that you do not touch! It is time to get a grip on your financial situation and do what needs to be done to help nurse your finances into good health.

Permanent Link | Comments (2) | Write a Comment | Send Link

User Comments

1. re: working with homeowners who find themselves in trouble

Written by: PeggyAnn McConnochie

Aug. 11, 2007

http://www.realtor.org/government_affairs/housing_opportunity/resource_center/mortgages.html

Here is the website with additional information for those who are interested!

Reply | Quote

2. re: working with homeowners who find themselves in trouble

Written by: Frankie Davis

Aug. 15, 2007

Peggyann,

Your comment on homeowners who are in trouble is very timely. As a realtor, I am encountering many people who are in serious trouble who do not want to face reality about their situation. I like what you said about getting on a budget, and facing the fact of possibly renting until they get themselves out of the hole.

Thank you for the wise words of wisdom.

Frankie Davis, Southwest Ranches, FL

Reply | Quote