Are you Looking good on Paper but Bleeding Slowly to Death from a Thousand Paper-cuts? Over-extension is the bane of life for many people. Access to easy credit and low interest rates persuaded many of us that the right time to buy is NOW!
Except that the NOW went on forever and the WHY or DOES THIS MAKE SENSE was rarely pondered with intense scrutiny. If you could qualify, it was proof positive that you could handle it. Never mind that the standards in some cases were ridiculous (come on..no doc, no verification) Most who are in this category have not defaulted..YET and don't want to. But stopping the bleeding will require some changes.
Here are some simple things which can be started Immediately to begin to get the situation under control.
1. Stop Spending Money!
- Eat everything in your refrigerator and freezer before going grocery shopping. Take lunch to work...this will speed up the ability to accomplish recommendation number one which is...Stop Spending all your money. Lunch money can easily top $100-$150 per month!
- Other simple changes that can be made right away are: Wear the clothes that you already have, sell the ones that you are no longer wearing. Have friends over to your house for dinner rather than going out. This will probably create a much more enriching dining experience than anything that could be purchased at a restaurant!
2. Figure out Where the Money has been going.
- Honestly, most of us have no idea where money goes. Using "plastic" to pay for stuff has a way of making it seem like we're NOT really spending money. But you are! Going Cash Only...by this I mean, paying Cash for your purchases has a way of really clarifying the effect of a purchase. When you fill up a gas tank for $100 and you take out a Hundred Dollar Bill...well, let's just say it has a different feel than putting the charge on your credit card. You may begin to re-evaluate your NEED for a gas guzzling SUV.
3. Ask for help.
- Many people don't realize just how much assistance is available on-line. Do your research. Most banks are very aware of the growing crisis and are doing their part to offer assistance and creative solutions. Now, since they tend to be behind the curve in situations like this...they're hoping that you won't mind bleeding to your financial death, or at least won't protest too much. Don't be shy about asking them about ways in which they can assist you to stabilize your financial condition. You Never Know What They Might Say Unless You Ask!!
4. Have Your Current Financial Picture including your Present Mortgage Professionally Evaluated.
- You may be in the wrong type of mortgage. It may have sounded good when it was first presented..ie. Interest only products...but paying the bare minimum and increasing your debt load gets old after awhile. The house does not get newer looking and it's no fun to be upside down on a loan because you've not been paying the principle.
- If you're in the position to do so, perhaps by saving money from suggestions #1-2, this is a good time to re-finance to a fixed mortgage even if you have to come to the table with some money. No...DO NOT increase your debt! That's taking another step backwards. There are a number of excellent loan officers who have their client's interest at heart. If you need a recommendation, we'll be happy to provide one.
The steps described above can be very helpful in arresting the progress of a downward slide if you are having difficulty in making monthly payment obligations or have missed a payment on a mortgage. It may still be helpful to have a comprehensive evaluation of your home's Value in the Current Market to keep all your options open. If you would like a detailed comprehensive analysis of your particular situation, you can contact us through e-mail or by phone via this blog.
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