How to avoid foreclosures?
With falling property prices if you are worrying about foreclosure, you are not alone. Bills has some excellent tips on how to prevent a foreclosure in the first place:
- Avoid buying top-of-market. If a buyer is unsure if properties are a good value, it’s best to hold off on buying. This is one area where it can be smarter to rent until you are certain property values have settled.
- Put enough money down. A down payment of 10 to 20 percent of the home price is optimum.
- Avoid ARMs, interest-only loans, and other mortgages that might increase. If you can’t afford a home with a traditional mortgage, you probably can’t afford the home.
- Don’t take a cash-out refinance. Consumers should avoid refinancing their home to take cash to pay off debts or go on vacation unless they have a very high percentage of equity.
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