Making Home Affordable

by Terry from Iowa USA

Making Home Affordable I'm a sub-prime buyer. In late 2007, with a serious increase in apt. rent looming, I looked at condos in "fun." A Realtor latched onto me and convinced me a 30-year loan w/1st ten years at 100% interest, would guarantee me a set payment.

I figured this would avoid annual barters with landlords and give me a trouble-free new home. Being almost 65, I was glad to be a homeowner but, without the responsibilities for exterior care/maintenance.

The Realtor's mortgage broker buddy set up the deal and the one potential fracture in the deal was property taxes. The broker assured me they would definitely increase because my new townhouse hadn't been appraised but not by more than a "few dollars." That statement was not in writing.

As I enter 2010, my lender informs me my property taxes (built into the escrow) are indeed well off the mark. My mortgage increased 25% January 1. I am left with about $136 for pet supplies, medication co-pays, gasoline for my car -- and food! I am once again using credit cards to buy groceries.

My niece by marriage went with me on all my "buying" trips because I admit I am not sharp in financial matters. She felt as comfortable as me with the offer I was made. We both felt it was a good deal. We now both believe we were misled and that I should never have purchased a home (or been allowed to). My nephew and she are now buying their dream home and hoped their Realtor might also help me sell mine (which is necessary). He looked up my property and concluded it is not worth what I owe and he could not collect his 7% commission. No deal.

I suffer from a chronic lung condition, from CFIDS and am a cancer survivor (ten years). I cannot work to supplement social security and a stipend of a pension. I am trying to find computer work I can do at home but without success so far. I want out of this "mistake" and truly want to get myself to a milder climate for my lungs. I feel caught in a Catch 22 and unable to get out without destroying my credit. Are my niece and I missing a possible solution? Thank you.

Kate Answers: Making Home Affordable

Dear Terry,

Sadly, many homeowners are caught in the cycle you describe -- Unaffordable monthly house payments yet refinancing to lower interest rates is no longer an option due to declining real estate values.

Hope For Homeowners

Our current administration has introduced unique help for homeowners through the Making Home Affordable program. It features both HARP, the Home Affordable Refinance Program and HAMP, the Home Affordable Modification Program.

HARP, the first program in Making Home Affordable, is designed for homeowners making timely monthly house payments but due to a loss in equity discover traditional refinancing is not an option.

HAMP, the second program of Making Home Affordable, assists homeowners in modifying their mortgages due to an interest rate increase or a decrease in income.

If you are a homeowner who needs urgent help or additional information from the Making Home Affordable program, contact the Homeowner HOPE Hotline: (888) 995-HOPE

Property Tax Tips

Estimating property taxes on new construction can be tricky for lenders. Some are better at it than others. It sounds as if you were not properly informed. I have seen local tax boards offer special programs that discount property taxes to Seniors. Be sure to ask if the discounted amount is deferred for repayment when your property is eventually sold.

Discover Your Inner Homeowner Savvy

Because so little is taught in our schools to prepare for home buying and home owning, this is the very reason I created and author my two websites, Get-Your-Best-Mortgage-Rate and my latest venture, Prime-Real-Estate-Articles. I hope you will share them with your friends.

Click here to post comments on Terry's letter.

Terry, I send my best wishes to you and your family.

BONUS! Mortgage Loan Modification Answers

Many homeowners are asking, "Can I do a modification myself?" The answer is yes. But ask yourself this question first. "Should I do the home loan modification myself?"

Get answers to mortgage loan modification questions here right on Prime Real Estate Articles. Discover your inner homeowner savvy!




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