Posts Tagged ‘house’

Should I Stop Paying My Mortgage?

A record number of foreclosures have hit the banks in the past couple of years and just when the banks start to see relief more foreclosures pile up everyday. Number 8 on the list of highest foreclosure rates in the United States is Michigan. Today I read an article from Michigan Mortgage Attorney . They ask the question “Should I stop Paying my mortgage?”

It’s very tempting to stop paying your mortgage especially if you are in the situation that many Michigan home owners are in today. House values in the United States have plummeted in the past two years. Many home owners owe much more than their house is actually worth and there is no relief in the housing value market in sight. Many home owners owe 2 or 3 times more than their house is actually worth. It seems like they are fighting a losing battle with their mortgage. Should they just walk away?

I agree with MichiganMortgageAttorney.com in the fact that I don’t they it’s the right thing to do. If you can pay for your mortgage then you have an obligation to fulfil the promise you made to the bank or mortgage company. When you purchased your home you signed a legal contract stating that you would pay x amount of dollars over then next x amount of years. The bank or mortgage company in turn trusted you to fulfil your obligation.

I do however realize that times are tough and sometimes paying your mortgage payment isn’t an option. There are other alternatives to paying for your home other than just walking away. Many banks and mortgage compnies are very willing to work with interest rates and financing terms so you can keep your home and fulfil your mortgage.

If you have not yet purchased a home please keep this information in mind when signing on the line for your mortgage. Make sure all your personal finances are in order and always have a backup plan. Your mortgage is probably the single most important financial decision you will make so make sure you are ready to take the leap.

A Bigger Home Means Bigger Expenses

If you think you are ready to purchase a bigger home you may want to reconsider. There are many hidden costs associated with upgrading your home that may max out your monthly budget. Consider all the extra costs and expenses associated with a larger home before you take out your mortgage.

Examples of expenses include: more expensive heating and cooling bills, higher home maintenance costs, increased property tax and insurance costs, additional furnishing costs.

The largest portion of your gas or electric bill is your heating and cooling system. Buying a bigger home will obviously increase your utility and energy bills. It’s something that’s easy to overlook when calculating how much you can afford in your budget for your new monthly mortgage payment. Don’t put yourself in a bind because of this overlooked expense.

Home maintenance costs will also increase. Every house will require general maintenance over time. From leaky pipes to a new roof at some point you will face repairs. With a bigger home these expenses will only increase.

Property taxes and insurance are both based on the value of the home. Usually the bigger your home the more valuable it is to you, the insurance company and government. The more your home is worth the more you will pay in annual property taxes and incurance premiums.

Additional furnishings will have to be purchased to fill up that extra space in your new home. Why would you buy a bigger home if you weren’t going to take advantage of the space? Be prepared to shell out some extra cash on furniture if you’re going to buy a bigger home.

Don’t get depressed when reading this article. I’m not trying to tell you you’re stuck forever in your starter home, I’m just saying be smart and plan ahead. Once you commit to a mortgage you’re usually committed for a while.