Owning a home is at the top of a person’s list of life goals. Years of savings are looking up, and the perfect place is up for sale. However, rushing to purchase real estate is not a great idea. Foreclosures are still at a high after the initial burst that forced many out of their homes because of bad loan policies. Avoiding PMI, unnecessary fees, high interest, etc. is the surest way to prevent foreclosure on a new home.
Legality of Foreclosure
The closing papers are signed, the keys are in hand, and the unthinkable happens. Whether health emergencies or losing a job unexpectedly, banks are not known for their mercy when it comes to mortgage payments.
The legal right to repossess is in the bank’s hands. The stressful situation is all-inclusive. The lender and borrower both scramble to pay the mortgage on time. But, many banks do not even give room for a grace period during a life crisis.
Steering Clear of Becoming a Foreclosure Statistic
Adjustable rate mortgages and subprime loans spiked between 2001 and 2005. The burst of foreclosures that followed was destructive, and many families found themselves homeless or moving in with family because of foreclosure. The lenders kept tabs on budgets and promised reasonable mortgages for even those with poor credit.
Real estate is in recovery, but bad mortgages still have some families by the throat. According to ATTOM Data Solutions, 66,401 American properties had foreclosure filings in October 2018. The number is trending down. However, it is still fluctuating at a quarterly or yearly rate.
The statistics of homeowners who understand their terms and fees of their mortgage is still low. The same group of people are not aware of assistance programs and mandates that have come out of the real estate bubble burst.
When signing any contract, even home loans, reading it in its entirety is a prerequisite set for oneself. Understanding the agreement is the most substantial hurdle a borrower faces. For home buyers who cannot reach the twenty percent down payment requirement become a target for additional fees. Private mortgage insurance, also known as PMI, is an obstacle they face when applied to monthly mortgage payments.
Do not become a statistic:
- Clear communication with a lender
- Making Home Affordable program
- Ensure the lender is not running a mortgage scam through research
A house becomes a home. No one wants to lose the feeling of safety because of assumptions and misconceptions.