We’ve been hearing about the crashing home mortgage situation for months, and how more and more people who got ARMS are now having to foreclose on their house. Home owners who can afford it are switching over to Fixed Rate Mortgages. But for many it’s too late. I’ve followed the news stories with mild interest, and with some wondering if I might finally be able to afford a house, with so many foreclosures.

Then, this weekend, I found out that friends of mine have lost their house. Not lost in the sense of they can’t quite remember where they placed it. They lost it. Their fixed rate mortage has gone up so much that they are having to come up with an extra $500 a month. They’ve had a few other unexpected expenses lately, nothing to much to handle, but all added together, they just felt it wasn’t financially responsible to go that much in debt every month. They tried to arrange special financing with their mortgage lender, and were told the lender was being inundated with requests and didn’t have the financial means to refinance so many at a lower interest. they attempted to find another lender but weren’t able to find one- there are fears the value of houses will continue to decline, perhaps significantly, even if temporarily. So, they weren’t able to find any other options. Their lender foreclosed on their house.

They have moved into an apartment, and are admirably making the best of it. But now that friends have been effected by the ARM meltdown, it is much more real to me.

I hope the federal government and larger lenders are able to do much more than the steps they have already proposed. My friends put their blood, sweat and tears into that house. It could be argued that they should have had a better understanding of what they were signing, but their own experience was like tens of thousands of others. They were assured this was the best way to go, and they trusted their lender. It isn’t realistic to expect everyone buying a house to become an expert on mortgage and home financing. they are responsible, but absolutely, so are the lenders, many of whom deliberately misled the home buyers.

I wish the best to my friends, and I hope we can find a way to stop this tragedy from becoming an epidemic.

When shopping around for Mortgages most people are talking about Banks.
Traditionally this is the place we go when we want to loan money. Don’t forget that lending money is big business and you have a lot of sources out there for this. One of my best sources for money is the Insurance Companies. I have very good experience with them and they have served me well over the years. They have always given me a lower interest rate than any Bank could offer me and also their service has been very good.

Terms have always been what I asked for and that has been difficult for the Banks to compete with. As most people have Bank accounts and use the bank for bill payments the have also been using the Bank for their Loans or Mortgages. The Banks have been in this situation for a long time and their business have been on autopilot. The industry is changing and that is one of the reasons you should shop around for rates and terms. Don’t forget that you are the customer and they all want your business.

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Well, LearningCredit.com will answer a lot of your questions and help you with simple and timely tips on how to get control of your credit, and your financial life in general.