Michigan Homeowners Can Use Refi Deals to Avoid Foreclosure

By Joe Taylor Jr.
Local Lender Columnist
May 19, 2006
One financial research firm's representative told the Wall Street Journal that three percent of "sub-prime" mortgage loans fell ninety days delinquent in early 2006. States like Michigan, where residents are riding out the effects of massive corporate layoffs and rising mortgage interest rates, could see that number grow even higher. By taking advantage of refi deals, Michigan homeowners can create an emergency cash fund and ride out the current economic storm.

David Bach, author of the Finish Rich book series, often advises his readers to build wealth by entering a mortgage early and letting it grow in value. However, Michigan families might feel anxious about sitting on equity when they need immediate cash to get through a layoff or a work stoppage.

Mortgage Advice for Nervous Michigan Residents

Maryland financial planner Ric Edelman, an occasional guest on the Oprah Winfrey Show, advises his clients that a calculated refi deal that gets cash out of a home can actually help families in crisis. Even in Michigan, lenders are willing to make fair deals with homeowners. In a state where real estate sales have slowed, due to so much business uncertainty, a refi deal that can consolidate debt or reduce monthly mortgage payments can make a huge difference.

Important Mortgage Advice

Edelman and Bach agree on one key concept that Michigan homeowners should take to heart. Even though paying a large mortgage bill every month might leave less room in the budget for other expenses, both experts insist that your house payment be made before anything else. Although missing credit card payments can damage your credit report, few credit card bills can cause you to lose your home. Missing a house payment could disqualify you from future refi deals or even result in foreclosure.

Sources:
Ric Edelman Finance
The Times Leader
Wall Street Journal

About the Author
Joe Taylor Jr. has covered business and finance news for Financial Times Television and CNBC. He coaches beginning mortgage brokers to provide better customer service and to understand creative financing opportunities.