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How to avoid trouble, or get out of it, Newsday, 6/25/06 Randi F. MarshallNewday Long Island: Business June 25, 2006 Here's some advice for homeowners hoping to avoid a problem with their mortgage payments - and those already in trouble.Say something. Ignoring your financial troubles, experts say, is the worst move you can make. As soon as you think you might miss a payment, call your bank and develop a plan to keep your house. "The banks really don't want to be in the real estate business," said Bob Moulton of Americana Mortgage Group in Manhasset. "They'd rather help you out than take your house over." Examine alternative products. They're not for everyone, but if it helps to lower your monthly payment, you can consider everything from the 40-year mortgage (or the, gulp, 50-year mortgage) to an interest-only loan assuming you can pay the principal when it comes due. Know the "What if's." If you have an adjustable-rate mortgage, or ARM, find out how much it can adjust in a given period and how high your monthly payments would be in each scenario. Find a fix. Fixed-rate mortgages are higher than they were a year ago, but still may be far more reasonable than an adjusted rate on an ARM. If you can get into a fixed-rate mortgage, and thus avoid the unknown of an ARM, do it, said Jonathan Pinard, of United Mortgage Corp. in Hauppauge, who is president of the Empire State Mortgage Bankers Association. If you haven't bought a house yet, look forward before you do. Don't spend more than you can handle, and think five years out, at least, said EJ Ridings, the chief executive at Trump Mortgage, a Manhattan mortgage broker that is about to open an office in Southampton. "Every borrower is different," Ridings said. "Ultimately, it's about going into the product that fits you the best." Whether you're a new buyer, or a borrower hoping to refinance: Shop. It's a refrain Mortgage Bankers Association of America chief economist Doug Duncan likes to repeat, and with reason. "Make them compete," Duncan said of the host of lenders seeking new business. "And make sure that you never sign anything that you don't understand." Be aware of potential scams that offer to get you out of delinquency or out of foreclosure. If you have little equity in your house, try to make your payments and "sit tight," said Lynn Law, director of education and counseling with the Long Island Housing Partnership, which works with home buyers and borrowers when trouble looms. "Don't rush to sell the house," Law said. "If you can make it work, what goes up may come down - but it will go back up again."
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