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For Homeowners Theres No Such Thing as Easy OneSize FitsAll Financial...

It was only a short time ago when adjustable rate mortgages were offered to every homeowner as the best option on the market. Today, interest rates skyrocketing, a record number of homeowners will need to make major adjustments to their financial plans over the next year, particularly if they's8217;re finding themselves in trouble soon. Many companies have already begun pushing refinancing, or even bankruptcy/foreclosure consideration to homeowners, but the reality is that there may be many options available worth considering and researching before drastic measures are taken.



's8220;The lesson that homeowners need to take away is that there isn's8217;t a set financial product or plan that suits everyone, not the way marketers would have you believe,'s8221; says Diane Gray, Novadebt's8217;s Director of Education and head of the Housing Counseling Program. 's8220;Every homeowner is different and needs to examine their own personal situation 's8211; including budget, debts, obligations, mortgage, age and life plans 's8211; before making swift decisions to refinance or take more severe measures.'s8221;



According to Gray, homeowners 's8211; or potential homeowners 's8211; should consider the following:



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Refinancing/Mortgage Length 's8211; The new trend around 40 and 50-year fixed mortgages may be the right answer for some, but not for others. For some that have adjustable rate mortgages coming due, signing up for one of these may be too drastic a move in the opposite direction than is needed. 's8220;When choosing a mortgage or to refinance, you need to also consider the length of time you plan on staying in your current home as well as estimated monthly payments and rates,'s8221; says Gray. For example, some companies offer mortgages with only 5- and 7- year fixed rates, which may be perfect for first time home buyers only planning on living in their first house for three or four years before moving on to the something larger. 's8220;There are still many options available on the market for whatever your personal needs may be.'s8221;



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Personal Budgets Adjustments 's8211; Homeowners need to consider their financial situation holistically, and not assess their mortgage or housing costs in a silo from their other monthly expenditures. For those homeowners looking for extra funds, there may be other options available whether it's8217;s downgrading cell phone plans or taking your lunch to work. For those that seem to have difficulty organizing and sticking with a monthly budget, there are online and counseling resources available to help provide some direction.



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Negotiation 's8211; Contact your mortgage company and see if they would be willing to negotiate your mortgage agreement. Lending companies prefer homeowners to make consistent and timely payments on their loans versus defaulting, and so in these circumstances are often willing to make adjustments. Should they suggest the solution of rewriting your mortgage, be sure to look out for pitfalls such as large balloon payments, prepayment penalties, increasing interest rates, points, and negative amortization.



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Shop Around 's8211; If negotiating does not work, now may be the perfect time to do some comparison shopping with other lending and mortgage companies. Be sure to mention your current interest rates and payments as a bargaining tool to negotiate the best deal.



In 2005, Novadebt's8217;s certified counselors helped over 4,092 people through their Housing Counseling program regain financial footing and plan for their future. The nonprofit credit counseling agency provides free access to certified counselors, information and resources through its website at www.novadebt.com and its toll-free number 1-800-772-4557. They also host workshops specifically tailored for homeowners in select sites around the country. For more information call Novadebt toll-free.



Since its inception in 1991, Novadebt helped over 250,000 people to regain their financial footing and repay approximately $340 million to their creditors. Novadebt maintains an average active caseload of approximately 15,000 consumers at any given time. A non-profit, social service agency licensed and bonded by the New Jersey Department of Banking, Novadebt is a member of the Association of Independent Consumer Credit Counseling Agencies (AICCCA) and the Better Business Bureau. The United States Government recognizes Novadebt as a charitable organization under 501© (3) of the IRS Code. All of the agency's8217;s counselors are certified by the Institute of Personal Finance.

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