Financial Risk

I had a fellow mortgage person tell me that a deal we did last year was in foreclosure.
The client worked at Ford Motor at one of the plants and got laid off. He had put on an addition. The client didn't know he was going to get laid off that I know of. I feel bad for this guy. I feel bad for his family. I know how tough it is out there. The construction industry is way down, friends of mine are working 1 and 2 days a week if that. The real estate industry is slow with houses being on the market sometimes over a year. Pfizer, GM, Ford, and Chrysler are all downsizing here in Detroit.
The bottom line is before you consolidate debt into a loan, fix the house up, or put an addition tread carefully. Find out what your house is worth. Is your house worth the money to add on or to update at this time? What would happen if you had to sell right now? Could you even sell your house for what it is worth? What would happen if you lost your job could you survive with the added payments?
The economy is Detroit is tough right now. It's time to make the right financial choice's for you and your family. Don't let some smooth talking loan officer talk you into a negative amortization loan unless you have no other choice and you have to lower the payment or loose the house. If you can't survive in these tough times, it buys you some time in the house.
I have seen some financial planners pitch this product to their clients because they make a lot of money off of it. (Some of their clients should have never even been asked, but the financial planner was looking out for himself more that the client) Some of the other names for a negative amortization loan is pick a payment loan, 4 choice loan, smart choice loan. It is a way of giving you 4 choices on which payment to make each month. Unfortunately the cheapest choice is actually adding principal onto your mortgage balance each month. All of us want the cheapest payment right. Unfortunately it becomes a nightmare for the homeowner later on because he owes so much more on the house.
If you hear 1%, or 2% or a rate so low it seems to good to be true. It is. Current rates are higher than 5 1/2 % for a 30 year fixed. (even with points) So if you hear 1, 2, or 3, 4% there is something hidden that they haven't completely told you. If the payment is different from what all the other loan officers are telling you then check into more. Feel free to pick up the phone and call me at (313) 310-9855 or go to my website www.russravary.com and email me about it, if there is a program you don't understand.
So the bottom line of this blog is don't take on any more debt, or update your house if you are worried about your job. Do the simple things like painting or updating the carpeting. Simple less expensive things that will make you feel good about your house yet not cost you a lot. For more mortgage information go to http://www.russravary.com/