Homes are foreclosed due to the owner’s inability to pay off its mortgage, which arises out of a number of reasons. To ensure that your home remains just that - your home - look to these prudent suggestions in keeping up to date with your mortgage dues.
Exercise due diligence
As a general rule, it’s important to do due diligence. Research before you commit to a home, a contract, a bank. Consult with professionals. Look to technology like mortgage calculators to see whether you can manage and adapt to today’s economy with your finances and your lifestyle in check.
Look for fixed-rate mortgages
Rising interest rates may spell impending disaster. It’s common among subprime mortgages. Homeowners who don’t sufficiently prepare themselves for the scenario often suffer. Look, instead, to manageable fixed-rate mortgages where you’ll have knowledge of how much monthly payments will cost for up to several years
Consider monthly overpayments
Look for a mortgage that permits monthly overpayments without penalty fees. Overpayments - that is, paying more than the standard per month - allow you to reduce the length of your mortgage. It reduces the cost of future payments as well. Should interest rates rise, several months of prior overpayments should
save you money and allow you to adjust better to the increase.
Invest in life insurance
Among the common reasons in missing out on mortgage payments: sudden death, illness, or an accident that leaves the homeowner, or a family member, indisposed to work. Invest in life insurance that offers disability coverage. In the event of unexpected tragedy, the insurance money could be used to pay off your debt.