Member Benefits from Union Plus
Act Now If You Have An Adjustable Rate Mortgage
By Gerri Detweiler (Gerri Detweiler is a widely respected consumer educator and author who specializes in credit issues.)
Like millions of Americans, you may have an adjustable rate mortgage (ARM) that will change this year or next. Rising interest rates, taxes and insurance, along with a sluggish housing market in some parts of the country, have many people worried about keeping up with their payments.
Dealing with mortgage problems is very stressful. The longer you wait to find a solution, though, the greater the risk that you may lose your home.
If you have an ARM, here are steps to take right now:
Talk to your lender. Find out when your adjustable rate mortgage will next adjust, how often it can adjust, and how much it can change. If the representative you are talking with does not seem knowledgeable, ask for a supervisor. Union Plus Mortgage has developed a free annual "Mortgage Checkup" program that will give you a review of your current mortgage, with no obligations. Call 1-800-848-6466.
Review your budget. If money is tight, go over your budget with a fine-tooth comb and look for places where you can trim your expense). A housing and credit counselor can be helpful in reviewing it with you. Also look for ways to increase your income. Can a stay-at-home spouse go back to work? These may not be long-term solutions, but they may give you the breathing room you need while you work on making more permanent changes.
Refinance. Try to get a loan with a fixed rate so your payment for principal and interest will stay the same for the rest of your loan. Keep in mind that your taxes and insurance may still rise, however. If you can get a fixed-rate loan with an affordable payment, it's an excellent time to refinance.
Call Union Plus Mortgage at 1-800-848-6466 to learn whether refinancing will work for you. If you have "less than perfect" credit, programs may be available to help. However, tightening guidelines for lenders could make it difficult to qualify. All Union Plus loans include unemployment, disability and strike benefits to help you make mortgage payments if you're ever out of work or facing financial hardship.
Sell your home. Although the idea of moving and renting may seem overwhelming, selling your home and paying off your mortgage debt may be better than falling behind or going through foreclosure. However, if the value of your home is less than the mortgage, you may not be able to do it. You will likely need a good, experienced real estate agent to help you sell your home fast. While it is on the market, make sure you look at other options in case it doesn't sell quickly, or for enough money to pay off your loan.
Get help. Call the Union Plus Save My Home Hotline at 1-866-490-5361 to arrange a confidential, free consultation including a budget analysis and advice to get you back on the road to financial recovery. The Hotline's HUD-certified credit counselors can advise you on restructuring your payments, and may be able to find ways to free up enough money in your budget to keep your home.
If you simply cannot make your payments, your counselor can provide advice for working with the lender. Your lender may be able to restructure your loan to a fixed rate, for example, or allow you to make smaller payments for a limited period of time (those payments will be added to the loan balance, though.) If necessary, your counselor will make referrals to other resources or alternatives such as a deed-in-lieu of foreclosure (where you essentially turn the home back over to the lender). You'll leave the session with a plan outlining actions you need to take to successfully stay in your home.
Get legal advice. If you have a lot of debt, and you are unable to work out a plan with the help of a housing and credit counselor, bankruptcy may be a last-resort option for saving your home. While bankruptcy does not erase your mortgage debt, it can help you catch up on your mortgage and may reduce or eliminate other debts so that you can remain in your home.
The Union Plus Legal Service can help you find a lawyer that you can talk to for free by calling 1-888-993-8886.
Watch out for scams. If you are looking for a fast fix to problems, be careful. One common scam, called "equity skimming" involves deeding your home over to someone who promises to sell it, or perhaps let you rent it and eventually buy it back. The problem is you are still responsible for the entire mortgage debt and if it is not paid, you will be on the hook for the balance plus any fees that accrue. Do not sell your home yourself unless you hire an attorney to review the paperwork for you.
Other scams promise to help you erase or eliminate your mortgage debt by challenging the debt. Unfortunately, this will likely just drag the problem out longer, and you may still wind up facing foreclosure, and even greater expenses.
Getting help early can save you money by avoiding late fees and extra charges, ensure you have the chance to explore all the alternatives, and most importantly, will give you peace of mind.
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