Posted by Ryan Blay on March 24th, 2011 in Foreclosure - Saving Your Home, Real Estate
1. Lakelaw believes homeowners should be treated with kindness, courtesy and respect – and that core belief does not end when it’s time to get on the phone with your mortgage company. The rudeness and lousy customer service that mortgage companies across the country use would put any small company out of business. But it’s typical of our nation’s biggest servicers, and there’s very little ability to say goodbye and take your mortgage to a business with better customer service. That means lies and misleading statements about ongoing litigation, modification attempts, and questionable accounting practices.
2. Property taxes are the hidden culprit in many foreclosures. Counties are bleeding money, so they have no choice but to raise property tax rates. Because property values are plummeting, the tax revenues fall, and next year’s rates are even higher. This vicious cycle won’t end until the foreclosures stop and property values can go back up on their own. Why are you paying the same for your $100,000 house as you were 3 years ago when your house was worth $150,000? A very good question to ask as you plan your budget.
3. On top of property taxes, the true cost of home ownership is the principal, interest, and homeowner’s insurance. If this amount in total is too large, the rest of your budget will fall apart and you’ll be forced to borrow money through a retirement plan early withdrawal, credit card advances, payday loans, and title loans. There is a reason that the government’s Making Home Affordable program set a target of 31% of gross income to cover principal, interest, taxes & insurance (PITI). If your payment is hovering around 50% of your gross income, it is eating up too much of your budget and you won’t be able to save or set money aside. Maybe it was affordable before the pay cut, or before a loss in hours. But your home is supposed to be a place to feel secure and enjoy ownership, not to worry every minute about borrowing from family and friends to keep above water.