News About Properties

Let the borrower beware when getting mortgage

Big purchase demands extra dose of caution

Whether you already have a mortgage or you plan to buy a house in the next year, here are seven mortgage tips for 2007.

Review your mortgage — does it still fit your circumstances? Interest rates change, children are born and grow up, sometimes you need to fix up the house and sometimes you need to move on. Life events can trigger changes in the way you pay for your house.

“Every year,” says Dan Hanson, who oversees the retail branches for Countrywide Home Loans, “say, ‘What’s going to happen this year? Do I have a child who, in a year, is going to college? Are we going to have a child, maybe add a bedroom or have to move?’ ” The answer might make you go mortgage shopping.

Pursue options before defaulting on mortgage

If you are falling behind in your mortgage payments, the first thing you should do is pick up the phone.

“A lot of times it’s just a matter of telling your story to the bank,” said Jonathan Pinard, president of the Empire State Mortgage Bankers Association of New York. “But a lot of people avoid making that phone call.”

Some people worry the bank will immediately foreclose, while others think their lender won’t notice, experts said. Many don’t want to admit to themselves–or others–that they can’t handle their bills.

In fact, this is the worst thing a distressed homeowner can do. Not only are you increasing the risk of foreclosure, but you could wind up owing thousands of dollars in interest, penalties and legal fees, experts said.