Unless you’ve been living on a Deserted Island, Like Tom Hanks in Castaway, I’m sure you’ve been hearing about the mortgage market meltdown. I wanted to take a moment to shed some light on what might be the greatest opportunity of your life.
Only a few months ago, credit was easy to get. Anyone who could fog a mirror could get a mortgage. Now with over 115 lenders either bankrupt or closed it would appear that we are in the worst credit crunch in history.
How can you benefit from this apparent disaster?
That’s a great question, I will get to it in a minute, but first, how did we get here?
Easy credit caused you to spend more than you wanted too. With historically low rates and the longest real estate boom in history, Wall Streets appetite for mortgage backed bonds was insatiable. They just couldn’t get enough of them.
Homeowners everywhere were refinancing to take money out of their homes. People would pay for everything from home improvements and debt consolidation to daily life expenses with a mortgage refinance.
Then the real estate market slowed and people started to default on their loans. It seemed like it might be contained to just the subprime market, if only that were true.
Then American Home Mortgage, the 10th largest mortgage bank in the US fell victim to an already troubled market place. They went bankrupt in less than one week.
Now lenders are raising rates and tightening up guidelines. It would seem that there is no way a less than perfect borrower would have any chance of getting a loan.
The lenders problems can be your opportunity. Many lenders are desperate for new borrowers. The only way they can stay in business is by making mortgage loans. That is where your opportunity comes in.
While many of you out there will have to pay a higher rate to consolidate your debt, it is still far cheaper than the credit card interest. This time around though, you need to have a plan.
You need to work with a mortgage professional that will help you budget yourself. In the past too many people weren’t worried about refinancing and then wracking up their credit cards again.
With all the cheap easy money that was out there and with home prices appreciating 20% or more per year, you could just refinance and pay off your credit cards again in a year or two.
It’s time to find someone who can guide you through the process and help you avoid going back into debt this time. It’s time to stop looking at your home as an ATM machine and get back to basics.
Consolidate your debt, cut up the credit cards, follow your budget and improve your financial life. That is what your new opportunity is!
About the Author
Marc Savage is a Nationally Recognized Mortgage Expert and Host of Your Home Your Money on AM 540 WLIE Saturday Morning at 10AM. Marc specializes in helping homeowners who have had a bankruptcy or other credit challenge find payment relief, achieve financial security, restore their credit and receive peace of mind. He is also a founding member of the National Association of Responsible Mortgage Lenders. Visit his website at http://www.yourhomeyourmoney.org for more information or call him direct at 800-592-5626. |
