In Buyer and Seller

Getting to the end of each month and feeling cash strapped is extremely stressful. There are lots of steps you can take to balance the family budget, but what if your mortgage is the main culprit? Taking action before you cannot make your payment is absolutely critical.

If you are spending more than forty percent of your monthly income on your mortgage, then experts say you are spending too much of your income on your home. In fact the ideal is to spend less than 30% of your monthly income on your home. If, for whatever reason, your mortgage is too expensive, then there are three options: spend less, make more, or sell your house.

Spend Less Money

This step actually encompasses so many different things that it does not simply mean not buying lattes or choosing the off-brand instead of the name brands. Steps you can take include:

  • Refinancing your house to lower your payment: Contact a loan officer and ask them about your options to refinance your house. If your credit is good or if you have equity in your home chances are high, then you will be able to refinance. You could also check out websites such as Lending Tree where you can shop and compare mortgages. Often now you can even include your closing costs into your mortgage so you do not have to pay out of pocket.
  • Talk to your lender: Many lenders have programs that help you modify your loan if you are experiencing a financial hardship. These modification plans often include lowering your payment. A simple phone call to your lender will likely provide you with what options they have available and the next steps you should take.
  • Make and sticking to a budget: Spending less money in other areas of your life will help you make ends meet even if your mortgage is expensive. Mint.com is a great, easy to use resource to get your started. Pay attention to where all of your money goes and cut expenses where you can.
  • Downsize where you can

Make More Money

This is easier said than done in many cases. If lowering your spending is not going to work for you, then the next step would be to look at the following:

  • Profit from your hobby: What do you like to do in your spare time? Wood working? Knitting? Cooking? Look closely at your hobbies and see if you can make money from them. You could start an Etsy store if you are crafty, stream your gaming on Twitch, or sell your extra garden produce at the local farmers market.
  • Sell things that you do not need: Selling of your excess possessions is not a long term solution, but it can give you some breathing room in the meantime. Besides, living in a tidier space can also improve your mood. Check out KonMari: The Magical Art of Tidying Up as a way to sort through what you own and what you might want to offload.
  • Find secondary employment: Getting a second job may be the last thing you want to do, but it might be the easiest way to make ends meet. There are lots of great options now such as after school tutoring if you have subject matter expertise, contract work through sites like Upwork, nannying for busy families, or teaching classes at the local community center. Get creative!  

 

Sell Your House

If your home really is more than you can afford, then selling it might be the best option. This is a particularly good strategy if you have any equity in your home. Once you sell, then you could use the profit to make a down payment on a smaller, more affordable house. If you don’t have any equity selling is still a better option than foreclosing on your home.

Feeling like you are drowning because of an expensive mortgage is stressful but you can do something about it. Taking action will help you figure out how to get out of the situation. Do know that time will not solve this problem. You need to take steps to either spend less, make more, or sell your home in order to prevent more serious consequences. If you are not sure what to do, then contact me or my team at The Power Is Now. You never know what solutions that my experts and I will unearth. Either way, you need to act now before your situation becomes worse. Act now, because the power is now!

 

Eric Lawrence Frazier, MBA

President and CEO

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