rocket finance

Home Finance: Mortgages & the Real Cost of Ownership

Home for Sale: river view, no basement, some yard

Yesterday, I presented rocket finance readers with my family’s mortgage story. We are not subprime borrowers, but our experience demonstrates how access to easy credit has caused the current foreclosure crisis in the United States. I am passionate about keeping others from making the same mistake. In the following list of articles, you can learn all you need to know about home finance, credit and home equity. If you are looking for a home, contemplating a HELOC, or looking for ways to hold down costs so that you can hang on to your home, this post is for you.

We have two posts from foreign bloggers who demonstrate that the problems are not limited to the United States. Plonkee from the UK writes the American subprime crisis: Should we care?. Mike from 4 Pillars tells us why the subprime crisis has not yet affected our friends to the north.

My Two Dollars explains why he doesn’t feel bad for those who over-extended themselves and are struggling with their mortgage. I am not always in total agreement with 2 buck’s politics, but I think he and I are in agreement on this one. My personal challenges in this area are my own fault and I don’t expect the government to bail me out. If you are facing a tough time with your mortgage, Randall from Credit Withdrawal wants to give you some steps to take in order to avoid foreclosure.

As you look toward a home purchase, Single Guy Money presents the real cost of homeownership. This is important! Pinyo from Moolanomy explains debt to income ratio. I bought my first house without ever having even heard this concept. I did not know what our ratio was and I certainly did not know when debt ration was getting too high. Jaime from I Paid for this Twice Already warns against the “Can we afford the payments?” mentality. Patrick at Cash Money Life explains ubiquitous the escrow account. My realtor used the word “escrow” while I was signing papers for my first mortgage, I just nodded, smiled and kept signing papers. She could have been speaking Japanese for all I knew.

Mrs. Micah explains why you might want to consider renting just a little bit longer. If you are still debating that question, Jim from Blueprint for Financial Prosperity analyzes the numbers extensively in his rent vs buy post.

Once you own your home, Madison at My Dollar Plan gives some good reasons to consider an Adjustable Rate Mortgage – remember, an ARM isn’t for everyone, but it is good to understand the concept and see if it applies to your situation. Ciaran at Chance Favors has put together historical piece on how we got to where we are in the US and warns against predatory lenders. I never thought that a bank would loan me more than my house was worth, but they did and they do! I believe that home equity loans are generally a bad idea, but what if you are drowning in credit card debt? Debt FREE Revolution tackles that important question in Pay off credit cards with a HELOC?. Did you know that your mortgage payment can change – even with a fixed rate loan? Make sure you pay attention to your mail so that your are not blindsided with a major change in your monthly payment.

Many people look at a house purchase as an investment – it can be and it is. Mike from Two Wise Acres gives a great deal of wise advice if you are considering a house as an investment. If you are debating whether or not to invest in a house or increase investment in the stock market, you should stop by Millionaire Money Habits. Sweat equity is a great way to increase return on your housing investment and we have made a great deal of improvements on our home, but it is not always easy or cheap. Remodeling this Life asks So you want to buy a fixer-upper?.

Once you sign the papers for that mortgage or home equity loan, do everything you can to pay down your debt and stay healthy financially. Hardworking blogger, Lynnae at Being Frugal, will help you save money with a huge list of frugal hacks for your home. You have to see this list.

Finally. . . if the unthinkable happens, Debtkid gives you some suggestions for dealing with the aftermath of a foreclosure.

If you decide to purchase your own home, congratulations! There are definitely benefits to homeownership. Just be sure that you have consulted every source of advice before you sign the papers. If you have done your homework, your home will be blessing to your family for years to come.

Picture by Jason Weaver.