My Mortgage Is in Default. What Now?

My Mortgage Is in Default. What Now?

Are you finding yourself in mortgage trouble? You're not alone. Here are some things you can do to help remedy the situation.

Many homeowners are finding themselves in financial troubles these days. With layoffs, rising mortgage rates and economic trouble all around, making ends meet can sometimes be a problem. As a result, millions of Americans are defaulting on their mortgage loans. You may even be one of them. If you have missed more than one payment on your mortgage loan, here are some things you can do to help rectify the situation.

Contact Your Mortgage Lender
Your lender is much more likely to work with you and your financial situation if you contact them as soon as you know there will be a problem. If you get a letter from your lender about your defaulted mortgage loan, it may be too late to do much about it. But if you call and talk to them as soon as you know you will be late on a payment or miss a payment, they will know that you are not just forgetting about your obligation and they can set up a payment plan to help bring your current over the next few months.

Ask Your Lender about HAMP
HAMP is the government program which is designed to help troubled homeowners refinance their mortgages when they default. HAMP stands for Home Affordable Modification Program. Some of the qualifications require the homeowner to prove their financial hardship, have a mortgage payment that is more than a third of their gross income, have a mortgage loan that began before January 1 of 2009 and have a balance of less than $729,750. If you qualify, you will likely be approved for a three-month trial modification of your loan.

Consider a Short Sale
Thousands of troubled homeowners are doing short sales with the home loans they have defaulted on. A short sale means that the bank that loaned the money for the mortgage agrees to take less than what you actually owe and then forgives the difference. However, depending on how this is reported on your credit report, your credit score could be damaged if the bank marks the item as “Paid Satisfactory” rather than “Paid in Full.” Find out how they will list it before deciding on this option.

Declare Bankruptcy
Although it is much more difficult to claim bankruptcy and rid yourself of your debts than it used to be, this may be a way to stop any foreclosure proceedings and help you start making payments again. If you have other creditors that you have been paying, you may be able to wipe those debts out so you can once again make your mortgage payments. Consider the ramifications of bankruptcy, though, before going through with this option.

There are many things you can do to help your situation if you are going to default on your home loan or if you have already defaulted. The worst thing you can do, however, is ignore it and hope it goes away. That never happens and you will just dig yourself deeper and deeper into debt by using that route.

Comparing New Homes and Existing Homes

Comparing New Homes and Existing Homes

When choosing what type of home you want to buy, there are several things to consider. One of the most important decisions you will have to make is if you want a newly-built home or an existing pre-owned home. Here are some pros and cons of each to help you make your decision.

When you decide to buy a home before the mortgage rates shoot up to high, one of the main decisions you will need to consider is if you want to purchase a new construction home or a resale home. This can be one of the most essential decisions you will need to make because it can help make you more comfortable with your choice. In order to make an informed decision, knowing the difference between the two types of homes will help you find the one that is right for you.

New Homes Have Modern Safety Features
When you decide to purchase a newly-constructed home, you can expect to find some of the most updated safety features within that home. When there are more safety features, there tends to be fewer hazards and this creates a better overall atmosphere for the entire family.

Existing Homes Often Have More Property
These days, it’s difficult to find a newly-constructed home with a huge backyard or any significant property. This is because today’s homes are typically built closer together. However, with older existing homes, you can usually find a larger yard for the kids or pets to roam around.

Resale Homes are Often Less Expensive
Many of the pre-owned homes that are on the market today have a lower price than the new construction homes. One of the reasons is because they don’t have the modern features that today’s new construction homes have. Also, depending on the state you live in, resale homes may also have less expensive property taxes.

Newly-Constructed Homes are More Efficient
Energy-efficiency is one of the things that today’s home builder has in mind when construction new homes. Today’s appliance manufacturers and window manufacturers make their products to save the consumer on electric and heating bills. With better windows, the new homes are better insulated, too.

Resale Homes have More Traditional Styles
Newly-constructed homes typically do not have the traditional feel that older homes have. You may be missing out on a formal dining room and other special features that are typical of homes from yesteryear.

Existing Homes have More Negotiable Prices
It is generally less difficult to negotiate a price on an existing home because the newly-constructed homes are in higher demand. In many cases, the builder is also involved in the negotiations with a new home so it is difficult to bring the price down too far. This means that you could possibly get more home for your buck by choosing to go with a resale home over a new construction.

Tax Tips for Homeowners

Tax Tips for Homeowners

Tax time is approaching quickly. Do you know the rules and deductions for homeowners?

With tax day approaching very quickly, everybody is looking for ways to save some extra money with legal deductions and other tax tips. If you are a homeowner, you probably already know that you can deduct the interest from your mortgage loan on your taxes. If you are doing your taxes this year or simply want to know about some legal write-offs, here are a few of them you should be aware of.

• You can write off the mortgage interest paid throughout the year on your first and second home as long as the two mortgage loans together do not equal more than $1.1 million. This is for married couples filing jointly. For individuals, the amount is cut in half.

• If you took out your home loan before October 14, 1987, many of the new tax rules do not apply to you when it comes to deducting mortgage interest and so forth.

• You can deduct the interest you pay on your second mortgage if the loan was taken out on or after October 13, 1987. The limit for this is $100,000.

• Property taxes are another deduction you can make on your income. However, you can only deduct the money you have paid for property taxes and not any money held in escrow if it has not been applied to your property taxes yet.

• Homeowners who use part of their home as an office can deduct a portion of the costs to pay for and maintain your home. You can deduct a percentage or insurance, repair costs and even depreciation as well.

• If you sold your home in 2009, you can keep the profits up to $500,000 for married couples filing jointly if the home was used as their primary residence for at least two of the last five years. Singles or married couples filing separately can keep up to $250,000 each when selling a primary residence.

• You can deduct some moving costs if you moved in 2009 as a result of a new job. To qualify for moving deductions, you must move within one year of starting a new job, you new home must be within 50 miles of your new job and other regulations.

• If you are a first-time homebuyer with low income, you may qualify for the mortgage tax credit which is equal to as much as 20 percent of the interest payments you made on the new home.

Tax guidelines and rules can be very confusing. Even if you know some basic guidelines like the ones above, it is probably best to consult with a qualified CPA to ensure you are doing everything correctly. A few simple mistakes could land you in hot water with the IRS so you don’t want to take any chances.