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When the real estate market takes a downturn, homeowners can find themselves with a mortgage balance greater than the value of their house. People often agonize over what to do and may receive conflicting advice. If youre in this situation, you have several options.

Keep Paying the Mortgage
If you can afford your loan payments and would like to continue living in your home for several more years, your best option is probably to continue paying your mortgage. In time, the real estate market will probably rebound, which means your homes value will rise and you will again have equity. You may also be able to get assistance from the U.S. Department of Housing and Urban Development.

Refinance
If you need to move relatively soon, refinancing may be the best option. If you can afford higher monthly payments, you may be able to refinance to a loan with a shorter term and reduce the difference between the value of your house and the amount you owe before you sell. If youre struggling to afford your mortgage, you can consider refinancing to a 30-year mortgage with a lower interest rate to reduce your monthly payments, but it may be tough to find a lender willing to refinance your loan if you owe more than your house is worth.

Modify Your Loan
Another way to stay in your home is to get a loan modification. That could reduce your monthly payments, but youd have to repay the loan over a longer period of time. Be careful, because some homeowners have found that the associated fees caused a loan modification to make little or no difference in their mortgage payments.

Arrange a Short Sale
If youre on the verge of foreclosure, a short sale could allow you to sell your home if you owe more than its worth. Your lender must agree to a short sale and approve any purchase offer. Depending on the state where you live, you might have to pay the difference between the loan balance and the sale price, unless your lender granted a waiver of deficiency or you had private mortgage insurance. A short sale would lower your credit score.

Allow the Lender to Foreclose
Letting your house go into foreclosure should be a last resort. Your credit would take a major hit, and it could take years to recover. You might also be responsible for the difference between the homes value and the mortgage balance if the house didnt sell for enough to pay off the mortgage and you didnt have private mortgage insurance.

Consider All Possible Solutions
Being underwater on your mortgage is a scary situation. Dont panic. Talk to a financial advisor, explore all available options, and look for a way to keep your house or to sell it without your credit score suffering major damage.

This article is intended for informational purposes only and should not be construed as professional advice.

Published with permission from RISMedia.

Refinancing your mortgage could help you lock in a lower interest rate, reduce your monthly payments, pay off your loan early or access equity to make home repairs or pay other bills. Despite all these potential benefits, refinancing isnt the right choice for everyone.

Would You Get Approved for a New Loan?
If you submit a mortgage refinance application, the lender will consider your credit. If your credit scores are low, you might not qualify for a competitive interest rate. You would be better off focusing on paying bills on time and lowering your credit card balances to boost your scores before trying to refinance your mortgage. Even bumping your credit scores up by a handful of points might put you in a tier that would make you eligible for a lower interest rate.

A lender will also consider the amount of equity you have in your home. You might have trouble qualifying for a conventional refinance if you have less than 20 percent equity, although you could be eligible to refinance through a government program. Tapping into your home equity could be risky. If you couldnt afford the loan payments, you might lose your house.

Would You Save Money?
If you cant afford to pay for closing costs, refinancing might not be a smart move. Even if you could roll them into the loan balance, that would reduce your equity and increase your monthly payments.

Think about how long you plan to stay in your home. Refinancing might give you lower monthly payments, but it could take several years to break even. You can find the break-even point by dividing the closing costs by the amount you would save each month. That will tell you the number of months you would have to stay in the house after refinancing to recoup the closing costs. If you expect to move before then, refinancing wouldnt benefit you financially.

Sometimes a refinance lowers monthly payments by extending the term of the loan. In the early years of a mortgage, most of the payments go toward interest. If you refinanced and extended your loan term, the monthly payments for your new loan would also go primarily toward interest at the beginning. That means you could pay interest twice on the bulk of your principal.

Some mortgages have a prepayment penalty or a charge that applies if the borrower pays off the loan early or refinances. Rules enacted in 2014 limited the circumstances in which lenders could charge prepayment penalties, but they dont apply to mortgages that were issued before then. If your loan has a prepayment penalty, figure out how much you would owe and whether refinancing would be worthwhile.

Consider All the Financial Ramifications
Refinancing can be a way to save a significant amount of money on a home loan, but it doesnt work out that way for everyone, since many individual factors come into play. Talk to a mortgage professional to decide whats right for you.

Published with permission from RISMedia.

Your home is likely your largest (and most important) investment. Not only is a home purchase a huge financial undertaking, but your house keeps you safe from the elements and welcomes you home after a long day. To keep your home as comfortable as possible (and to protect your largest assets value) it is crucial that you understand the basics of home maintenance.

Here is your crash course on home maintenance 101.

Monthly to Seasonal Maintenance Items:

Change HVAC filters (frequency need depends on pets and dust in your home)
Test smoke alarms, carbon monoxide detectors and fire extinguishers
Each seasons respective outdoor maintenance (including lawn and garden care)
Vacuum lint from dryer vent
Clean gutters

Each season will come with its own list of to-dos, and while it may be easy to push them aside until later, a small time investment now will mitigate the need for costly and time-consuming repairs in the future. With each season, be sure that you know the extra tasks you need to complete in addition to the ones listed above (such as covering spigots and wrapping pipes in winter).

Annual Maintenance Items:

Roof Inspection
HVAC Inspection
Flush Water heater (You may need to do this as often as monthly depending on the mineral content of your water)

As you can see, annual maintenance involves a good deal of inspections to the more expensive components of your home. While you can go the DIY route, experts recommend that you hire a professional to check for any issues that a novice may have difficulty spotting. Issues like loose tiles on a roof can cause extensive home damage under the right circumstances; it can be well worth the investment to hire a professional.

Published with permission from RISMedia.

If your home has a basement, there are many things you can do to make use of the extra space. From simple storage to a functional living space, finished or unfinished, the possibilities are endless.

Here are five ways you can utilize your basement.

Apartment
Whether your basement is already finished or you plan to remodel, turning the space into a guest or in-law apartment combines functionality and value in your home. Include a full kitchen or a kitchenette, as well as a bathroom. If possible, a separate entrance would be ideal, especially if you plan to rent it out, which can help cover mortgage payments or other home expenses.

Game Room
Adding an air hockey table, foosball table or other games is a great way to make use of this space. Create a pool room with comfortable seating and a bar for a fun and luxurious place to relax. Bring in classic arcade-style games, like PacMan or a pinball machine, for a nostalgic and kid-friendly hang out.

Den
If youre looking to create more of a family space, a den is a great choice. Dedicate this to your family as a space where you can come together, relax and bond. Add a projector for movie nights and a stack of board games for a family night in. Even use your den to host parties, watch big sporting events or celebrate holidays without taking over the main living area upstairs.

Studio
Are you or someone in your family an artist or musician? If so, you can turn your basement into a studio. Bring in whatever materials you may need, from easels and paint to recording equipment and soundproof walls. With this private space, you can dedicate yourself to your art whether its a career or just a hobby.

Storage
Of course, if you decide to skip the renovations or remodels, you can still utilize this space. Store your holiday decorations, seasonal items, spare linens, personal items and so much more in an easily accessible room. Your basement can also be home to your washer and dryer or even a spare refrigerator or freezer to hold extra food and drinks. And if you host parties or holidays often, you can keep spare tables, chairs, platters and more without feeling overwhelmed in your main living space and keeping your garage clear.

Published with permission from RISMedia.

The dripping of water from a faulty faucet isnt really loud, but it can be so annoying that it seems deafening. Plus, every drip is a reminder that youre wasting water, and money, which can make sleeping even more difficult.

Luckily, fixing a leaky faucet is often an easy job that just about anyone can do. Heres how:

Turn off the Water
Underneath your sink is a valve that brings water to your faucet. Turn it to the right to stop the supply of water. If by some chance there isnt a valve here, turn off the water for the entire house.

Remove the Handle
Start by taking off decorative parts of knobs, which you can do with a flat-head screwdriver. Then, use a screwdriver to remove the screw underneath the cover. If the screw is behind the handle, use a hex key or Allen wrench to remove it.

Take Out the Cartridge
The cartridge is a part of your faucet that turns with the handle, thus controlling the flow of water. You can loosen it with a crescent wrench. Some faucets may require the use of a specialized tool to loosen the cartridge. Check your owners manual. If you no longer have it, you can likely find information about your faucet model online.

Install the New Cartridge
Replacing the O-ring and washer may make the repair, but keep in mind that the new O-ring or washer needs to be a precise fit. Or, you can replace the cartridge itself. To buy the right cartridge, you should know the faucets manufacturer and model number. You can also bring your old cartridge to a home repair store.

Reassemble the Faucet
Tighten the packing nut with a crescent, but dont make it too tight. Then put back the handle. Turn the water for the faucet back on and test the faucet, both hot and cold water, for a few minutes each.

If, as you go along, you discover a different problem, or making this repair doesnt end the leak, it may be time to call in a professional.

Published with permission from RISMedia.