Foreclosure Filings Still Soaring, Up 62 Percent

Foreclosure filings continue to drag on the real estate market, with filings in April up 62 percent from a year earlier, a newly released report from RealtyTrac showed.

Industry experts blame the overall increase in foreclosures on a combination of risky loans to consumers in the past few years and slowing appreciation in home prices.  Unfortunately too many borrowers only focus on the rate as they believe it is the most important part of the mortgage process.  Mortgage companies and bankers advertise they have the lowest rates all day long on radio, TV, Internet, newspapers etc… The lack of education among home borrowers will lead to over 2 million foreclosures over the next few years.

For as long as homeowners believe that rate is the most important, they will miss on the most important; how to build wealth and protect their most important assets.   What is the most important? Saving $50 or $100 per month on a mortgage payment or being able to retire earlier?  Is saving $500 or $1000 in closing fees more important than becoming debt free? What will have a bigger impact on people’s lives? Saving $100 per month or having $1 million in liquid assets and 2 properties when approaching retirement?

Mortgage brokers and lenders are not all dishonest but there are enough shady characters that try to mislead borrowers because they only chase a commission paycheck.  Mortgage and real estate sales are the highest paid commission products. 

Mortgage brokers know exactly what borrowers want to hear; lowest rates.  Therefore they’ll use any tricks available to them to lure borrowers and close the deal.  In the meantime they will neglect all the elements of the mortgage process, that may have an even bigger impact on the borrowers’ long-term financial goals.

How can you explain that there are so many foreclosures?  If the rate was so important many borrowers would not be facing foreclosure today.  Unfortunately there are many things to consider when taking a home mortgage.  Many borrowers with adjustable rates were promised they could refinance after couple of years when their credit would get better.  With the real estate market flattening and Lenders tightening up their criteria many borrowers are stuck with those bad loans, and higher payments. 

It would have been a better strategy to deal with mortgage planners who understand the ups and downs of real estate market, and the overall economy.  The right mortgage professional would have put them into the right loan, as opposed to focusing on getting the lowest rates.  Those mortgage planners understand each client’s financial picture and long-term goals.  With this knowledge, mortgage planners can offer most suitable loan product, and help clients meet their financial goals by utilizing a mortgage as one of many tools in an overall financial plan.  The right mortgage, utilized in the right situation can have a significant impact on a client’s household cash flow as well as assisting in areas of asset accumulation. 

By choosing a mortgage planner with a strong financial understanding as well as a financial planner, a borrower can save more, invest more, reduce higher credit card debt, build their net worth and enjoy a better financial position.  Financial coaches will use strategies to enhance homeowners increase Safety, Liquidity, Rate of Return and reduce Taxation.

Those homeowners will have a foreclosure on their credit file for the next 12 years and that is certainly not going to help them qualify for the lowest rate.  By losing their home, they postpone the opportunity to build wealth like those homeowners who understand the need to be educated.  Mortgage Rate is not the most important factor in helping homeowners achieve financial freedom. What do you value most in life?  Saving a few hundred bucks or creating long-term wealth with Real Estate and other means?  How do you think people have achieved wealth?  By focusing on a rate, or working with finance professionals who gave them great advise. 

Homeowners need to understand that a mortgage should be used as a financial tool to build wealth.  Do you prefer to deal with an order taker chasing his next commission paycheck or a mortgage advisor who pursues educational opportunities as a conduit to gain a deeper understanding of a client’s overall financial needs and the impact a mortgage product can have on their loan-term financial goals.

Don’t make the huge mistake many homeowners make, which is to fail to educate yourself.   You must hire a team of finance specialists such as financial planner, mortgage planner, estate planning attorney and CPA to help you reach your retirement goals.  Your parents taught you everything you know.  What legacy will you live to your children?  Start somewhere, start today, and get help from advisors.

In our society, we create our own destiny, and we don’t want our legacy to ourselves in our old age to be one of fear.  You should never have to get up in the middle of the night in a sweat about paying your bills, and your mortgage.  But it’s up to you and no one else to start, and again, the time is now.

To Your Success,

Andre Plessis

The Mortgage Guru

Website: http://apply-free.com