How to Afford Rising Homeowner Payments

Homeowner and mortgage payments are rising and some people are having a difficult time managing to remain in their homes. Many are fighting foreclosure and struggling to maintain their most important investment.

There are three factors that both lenders and financial advisors agree should be considered before deciding upon a mortgage payment. These three factors are monthly income, long-term debts, and cash on-hand for a down payment. The general rule is that mortgage payments should not exceed 28 percent of a homeowner’s gross income.

The problems that many people are facing today were caused by not acknowledging these factors. Many received loans and bought homes that were out of their financial comfort zone and accepted adjustable mortgage rates that are now rising and forcing them into foreclosure.

To avoid foreclosure, the financial community suggests that they do not ignore the problem and expect it to go away. For some, missing just one payment can bring a home to the brink of foreclosure. At the first sign of trouble, individuals should contact their lender to explain the situation and to find out what can be done to help to alleviate the problem. Some lenders will offer refinancing to a fixed rate loan and in today’s economy, many of the refinanced rates are lower than usual. Research indicates that homeowners can receive help from the US Department of Housing and Urban Development. This agency can provide recommendations for credit counseling services.

Other suggestions for keeping up with the rising cost of home ownership are to cut back where you can on other expenses. Less eating out, shopping for clothes, and vacations are just three ways to better budget the money one does have in an effort to meet the monthly cost of owning a home.