Thousands of African American homeowners have loans ready to adjust in the next year. Still most don't qualify for the proposed "adjustable payment freeze" proposed by President Bush. If this describes you, it's time to plan and take action for yourself.
If you don't have an adjustable rate read this anyway. Next, share this information with other homeowner friends and relatives you know. One of the biggest problems for African American homeowners who find themselves in trouble with an adjustable rate mortgage is -waiting too long to take action.
Here's five actions you should take before your mortgage adjusts. Choose the ones that bests fit your situation. Performing one action may work to solve your problems. Or you may have to do all five to reach a solution.
The key lies in taking action before you're overwhelmed.
Now let's discuss the five actions:
1. Search For Better Rate Refinancing.
If you've planned enough ahead of time (meaning before you've missed any payments) you should be searching for better fixed rate refinancing.
Many lenders business is slower now and therefore motivated to still lend money (it's how they make money), but of course the relaxed policies of a year ago are long gone. You'll have to prove your ability to pay them back with more documentation, verification and numbers than in the recent past.
But if you have a good payment record you will find many good deals waiting for you. Again the key is to take action, the longer you wait the tougher the requirements grow.
2. Search For Ways to Cut Back.
It's surprising how much you can save by cutting back on a few luxuries. Premium channel cable or satellite T.V, Starbucks everyday, two gas-guzzling SUV's for example.
The key is to make priorities on what you're willing to give up to keep your home.
3. Search for Ways to Increase Income.
Can you increase your income? Work another par-time job? Start a small home-based business? Or take in a renter?
4. Consider Selling and Moving to Cheaper Location.
Another choice many people are taking? Simply selling the home and moving to a cheaper area of town, another city or another state. More owners choose this option who live in higher priced states like Florida, New York or California.
If you can sell your home and save your credit rating, this could give you a fresh start in another location. If you can't sell, can you rent your home for enough money to pay the expenses?
Many homeowners take advantage of this option when they find it hard to sell their home in a tight real estate market.
Renting your home in a tight real estate market works best if you live in a town with a high demand rental market. For example, you're close to a University, major tourist attraction, military base or beach, etc.
5. Contact Lender.
Even if you don't have a perfect payment record like the proposed plan requires, many lenders have talked about voluntarily waving this requirement ... If! If you have a perfect payment record for the last six months. So, stay tuned! Many other lenders will listen and work with you more now than ever before. Many previously hard-boiled lenders are starting to realize it's smarter to work with you - than take back a home in a slow real estate market.
The key is to contact the lender as soon as possible. The sooner you contact your lender - the easier it will be to work with them. You may be able to convince the lender to delay the loan adjustment yourself. So, keep a good payment record with them and contact them ahead of time.
Conclusion
The mortgage and real estate industries continue to look for answers, ideas and solutions. While they're looking for the answers, homeowners must take it upon themselves to seek answers for their individual situations.
One answer that remains true ... know one has all the answers! That's why it's important to keep informed, educated and aware, especially now. Hopefully this message has helped to encourage you to take action.
Roy Primm Founder and Publisher of BlackHomeOwnerNews.com one of the largest sources of information for African American Home Decor and Management on the internet. Subscribe to free newsletter and receive the latest home management information.
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