Keeping Your Records Clean

As we are entering the end of 2007, it is good to look back the entire real estate and financial market closely.

The credit problems appears to be the No. #1 news headlines recently. Stock markets have scary roller coaster rides made investors lots of sleepless nights. Major financial institutions such as Merrill Lynch, Citi Corp., E*Trade Financial Inc. and Countrywide all sent out serious trouble signals and millions of write downs had been processed and several CEOs had lost their thrones due to this single credit problem. 

As consumers and home owners, if you happened to be the last ones jumped into the housing market bandwagon during the past two years, and will have your mortgage rate reset in the next 12 months, I highly recommend you to keep close contact with your mortgage lenders, if you know you will have problems paying your payments in the months to come.

At the same time, keeping your expenses down as much as possible. Some obvious examples as postpone getting a new car till later, or expensive trips, and household items, such as plasma TV, home theater. All these big items expenses will eat your cash balance but if you can hold a bit longer and obtain them when things gets better and you feel you can afford them more confidently. For some, one less Christmas present may not be a bad thing to your credit card.

Lenders, especially these days are particularly sensitive of accounts with imminent rate resets. They sent out mass marketing documents, emails to remind home owners of their responsibilities and be alert if the foreseen problems need to have immediate actions.

At the same time, I would also encourage home owners to look into your mortgage program carefully. Get a better view of your plan, is the number  working right for your? What do you want to do with your property in the next 5 to 10 years? What if you had a bad program, such as negative ARM – and you wind up owing more in the years to come, if housing situation will not get better in your area. You need to talk to a financial professional, your Realtor or your accountant. Keep your record clean and straight is the best thing you do as you would take care of your health.

Please feel free to contact me, if you have any mortgage questions. Yes, I am a Realtor, but I know the mortgage loan business.


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