Subprime Mortgages Get a Powerful Cure
Just a few short years ago, subprime mortgages fulfilled an important role in America by increasing homeownership. But eventually the nontraditional programs known as designer loans created a trap for borrowers. Ask Kate brings a long-term plan and powerful cure to these unaffordable and skyrocketing monthly house payments.
The Damaging Results of Subprime Home Loans in America
- Borrowers became snared in the subprime syndrome, going from one short-term mortgage to another.
- Homeowners without a long-term plan couldn't break away from alternative lending cycle into traditional mortgage financing.
Kate's Transitional Plan for Borrowers with Subprime Financing
If you're struggling with these unaffordable mortgage terms, you realize a powerful solution is necessary to break free from the subprime syndrome. I have good news for you! Here is a long-term plan, the same plan I employed when I originated mortgages, to assist homeowners when transitioning into traditional mortgage financing.
Remember Your Important Refinance Dates
- Create a mortgage financing calendar.
- Circle the interest rate and payment adjustment dates.
- Mark the month your prepayment penalty ends.
- Begin refinance 90 days ahead of time. Don't put it off.
- Procrastination is costly so don't risk foreclosure.
Tip: See my 8 strategies to stop mortgage foreclosure.
Prioritize Your Home Loan
- Make it a priority to pay your mortgage on time.
- Pay your mortgage before other bills.
- Use the lenders' automatic bill-payer program to avoid late payment fees.
Tip: Discover peace of mind with stable fixed rate mortgage terms.
Protect Your Credit Record
- Mark a specific day on the calendar to pay bills and set a reminder on your phone.
- Pay bills before due-dates in case you encounter a glitch.
- Clear up lingering collections.
- Save time with online banking.
Tip: For busy people on the run, my helpful Quick Facts break down the mysteries of credit history and credit scores at Equifax, Experian, and TransUnion.
Establish a Savings Account
- Set up automatic deposits from each paycheck into your savings account.
- Maintain a minimum balance equal to at least 2 mortgage payments.
Tip: Learn how to beat the rat race by beating the bank at its own game.
Control Excess Spending
- Make a budget and stick to it.
- Don't buy on impulse.
- Use credit cards wisely.
- If you can't pay off credit card balances monthly, start using cash. (It's harder to part with cash!)
Tip: Knowing how much you can afford in monthly house payments is crucial to your future.
Safeguard Your Personal Records
- Save all paystubs. It is not unusual for lenders to request additional paystubs.
- The same goes for bank statements, all pages.
- File annual tax returns promptly and retain W-2 forms.
- Refer to my checklist for other important paperwork to save: Kate's Mortgage Checklist
Remain Living in Your Home Whenever Possible
- It's simpler and cheaper to refinance personal residential mortgage loans.
- It's more complicated and costly to refinance a non-owner occupied property.
- Before you renting it, carefully consider how you might remain living in your home.
Tip: Discover Kate's fresh approach to your refinance.
Maintain Your Home to Avoid Deferred Maintenance
- Fix leaky pipes before they cause water damage or mold.
- Clean and repair the roof to prolong its life.
- Finish home improvement projects in case you decide to sell.
- Keep exterior paint fresh.
Tip: How to tell the age of fixer upper houses.
Participate in Your Homeowner's Association
- Stay aware of local house values.
- Help keep your residential neighborhood safe and clean.
Tip: Want to see what other Readers ask Kate about home buying? Welcome to How To Buy A House where you'll find dependable answers to your questions.
Employment and Income Pointers
- Deposit paychecks right away.
- Document bonuses.
- Keep track of overtime pay.
- Establish 2 years in the same job field.
- Self-employment under 2 years hinders mortgage financing.
- Make yourself a valuable employee.
- Ask for a raise.
Tip: Wishing for freedom that only extra income can bring? Here's how to put your dream into motion today.
Kate's Cure for Subprime Mortgages
As you see, a powerful cure is necessary to break free from subprime mortgages. I've revealed a long-term solution to subprime loans, the same plan I used to help homeowners transition to traditional mortgage financing.
Do it now, while you're thinking about it! Begin implementing your plan to break the vicious cycle of subprime mortgages.
Keep Up-to-Date with Best Mortgage Rate Blog
Discover Kate's Best Mortgage Rate Blog today. Keep up to date on what's new about transitioning away from subprime mortgages and additional tips that unlock the secret code of mortgage lending.
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