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Don’t be left in the dark about your mortgage By Melissa Wirkus

The growing number of foreclosures and delinquencies that is spreading throughout the country has garnered a lot of attention recently; from both regular homeowners and industry insiders.

Everyone has realized that something needs to be done about the problem immediately, before it has bigger repercussions on the overall heath of our housing market and economy.

Although many of the problems we have been seeing are finalized and cannot be taken back, we can take steps to prevent more foreclosures and delinquencies from occurring in the future.

The one thing that every homeowner should do regardless of mortgage type, income or property is to understand their mortgage. Although this may seem to be a stupid thing to say, a new study shows us that most people do not understand their mortgage and its terms and conditions at all.

This ignorance and empathy that many people have about the biggest purchase of their lives is what has caused many of these foreclosures and delinquencies. Of course, there are some extenuating circumstances that happen that make it impossible for people to pay their mortgages; but for the most part, if the public is educated on their mortgage, we should see these numbers decline.

A recent article posted on RealtyTimes.com by Broderick Perkins, “Consumer Mortgage Ignorance Hurts,” discusses the problem with homeowners being left in the dark about their mortgages and how education needs to start immediately.

“Evidence consumer ignorance is also contributing to the growing number of foreclosures, more than one in three home owners couldn't tell you what type of loan they have if their home ownership counted on it. And sometimes it does. A new Bankrate, Inc. poll ‘Mortgage Ignorance Rampant’ found 34 percent of home owners do not know what type of mortgage they own.”

“Other findings include: Nearly one in three, 28 percent of those surveyed, worry either regularly or sometimes about how they will afford their payments next year. A similar percentage, 34 percent of homeowners with ARMs, do not know what they will do when their loan readjusts.”

The statistics mentioned above are quite sad, although not surprising at all. If homeowners were more aware about their mortgages, then they would not be surprised when their payment increases from time to time because they are in an ARM.

They would be able to plan out their payments accordingly so they had enough money to make them each month, or refinance into a different loan that better matched their specific situation.

“‘Clearly, many homeowners are uninformed about their mortgages,’ said Greg McBride, senior financial analyst at Bankrate.com. ‘With interest rates stabilizing, it's a very good time to assess whether they should refinance or not. Now may be the time to lock into a mortgage with a fixed rate which remains near historic lows,’ Mr. McBride added in a prepared statement.”

It is time for homeowners to take hold of the wheel and prevent more foreclosures and delinquencies from occurring in the future.

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