Real Estate Market Survival Tips

Rising delinquencies and defaults are setting records across the country. It is a nerve-wrecking time for many homeowners, and a confusing challenging time for potential homebuyers.

If you are a homeowner, and are thinking of selling, this is probably not the best time.

If you can still afford your mortgage payment, then you should reconsider selling. If you are in a panic because of the tumultuous housing market, take a deep breath and relax. Determine what your income will be at least for the next year. If there are no anticipated earning losses, then you should next determine your mortgage payments for the next year. If you have a fixed rate mortgage, then it is simple to determine....it stays the same. However, if you have an adjustable rate mortgage, check your paperwork to determine when the rate will reset. You need to know if the reset date is quickly approaching, this is imperative information you have to know in today's real estate market. If your adjustable rate mortgage is due to reset soon, will the new payment be higher than you can afford, or will the adjusted payment still be within your means? If the reset date is still a couple of years away, then perhaps you might sit tight and wait out the downswing in the real estate market, assuming you can afford your current payment.

If you check the reset date, and it is quickly approaching, you need to make some decisions. First, will the new payment be higher than you can afford with your current income? If yes, then you need to take inventory of your options.

Can you realistically increase your income to offset the new mortgage payment increase? Will you want to do that?

If income will not increase to cover the mortgage increase, it may be time to start looking at the refinance option. The sooner you work on finding out if you can qualify for a refinance with a fixed rate, the better. Know what you can and cannot do early in the game rather than waiting until it is too late.

If you find that income will no longer be sufficient after adjustable mortgage increase, and if you find that you will not be able to qualify for a refinance, then it's time to look at your next options.