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Financial problems can strike at any time. An illness or injury can leave you or your spouse unable to work, or a childs or parents medical issue can require you or your spouse to cut back on work hours, take an extended period of time off, or quit. In such a situation, your family may be unable to cover your mortgage payments. Help is available, and the quicker you ask for it, the better.

Call Your Mortgage Company ASAP
Contact your loan servicer as soon as you realize you wont be able to make a mortgage payment on time. Be prepared to explain your circumstances, including how a family members illness or injury has affected your finances. Let the representative know whether you expect the situation to be temporary, long term or permanent.

Be prepared with figures on your households monthly gross income, mortgage payments (including a second mortgage and/or home equity loan), account balances and minimum payments for credit cards and other loans, savings account balances, and other assets. Providing specific information will allow the representative to give you detailed advice on programs that can help.

Explore a Range of Solutions
If you expect the illness or injury to affect your familys finances temporarily and anticipate that things will get back on track relatively soon, your loan servicer may suggest forbearance. That means your mortgage payments would be reduced or suspended for a period of time, and later youd have to make larger payments to catch up.

A repayment plan is another option to deal with a short-term financial problem. A portion of your missed payments would be added to future mortgage payments until you got caught up.

Your lender may also suggest reinstatement to deal with medical expenses and a temporary reduction in income. That means you and the lender would agree that youd pay the past due amount, plus any fees and penalties, by a specific date.

If you expect that a family members medical condition will permanently affect your finances, you may be able to get a loan modification. That would permanently change the terms of your mortgage, such as by extending the term, lowering the interest rate, adding missed payments to the end of the repayment period, or making another modification. The lender may even be willing to forgive some of your mortgage balance.

Dont Wait to Address the Problem
If an illness or injury in the family has left you unable to afford your mortgage, contact your lender as soon as possible to explain your situation. Many options are available to help people in difficult circumstances, but your lender cant offer you assistance if you dont ask for it. Provide detailed information, explore a variety of options, and keep records of all your communications with your mortgage servicer.

Published with permission from RISMedia.

When shopping for a mortgage, one of the most important decisions youll have to make is the length of the repayment period. Most homebuyers choose 15- or 30-year mortgages, but some lenders offer additional options. The length of the term will have a major impact on your monthly payments and the amount of interest youll pay over the life of the loan. Before deciding on a mortgage term, think carefully about your current financial situation and goals.

How the Loan Term Can Affect Payments and Interest
A 15-year mortgage has significantly higher monthly payments than a 30-year loan because the principal needs to be paid off in half the time. Payments on a 15-year mortgage are not quite twice as much as payments for a 30-year loan because the interest rate on a shorter mortgage is lower. Paying off your mortgage in 15 years could allow you to save tens or even hundreds of thousands of dollars in interest, but you might be more strapped financially because of higher monthly payments.

Which Loan Term Is Right for You?
If youd like to save for retirement and/or your childrens college education, choosing a 30-year mortgage with lower monthly payments would leave you more room in your budget for those priorities. If youre relatively young and your savings were allowed to accumulate interest over a period of decades, they could outpace what youd pay in mortgage interest. Low loan payments could also allow you to pay off high-interest credit card debt and free up money for other priorities.

If you took out a 30-year mortgage, you might be able to pay it off sooner by making extra payments or by paying more than the required monthly amount. Some lenders charge prepayment penalties, so check with yours before you pay extra.

If you dont have much other debt and youre already saving for retirement and your childrens education, you might want to consider a 15-year mortgage. The payments would be much higher than they would with a longer loan, but youd pay less in interest. If you plan to retire relatively soon on a fixed income, it could make sense to pay off your mortgage quickly to avoid paying for housing after you stop working.

Before you choose a loan with a shorter term, think about your current income and whether you could afford high mortgage payments on top of everything else in your budget. Also think about how secure your and your spouses jobs are. Make sure you have a substantial emergency fund in case one of you lost your job or became unable to work for some reason.

Look at the Big Picture
Lenders offer mortgages with a variety of terms for homebuyers in various circumstances. Consider the amounts youd pay each month and over the life of the loan, and choose the term that would also allow you to achieve your other financial goals and live comfortably.

Published with permission from RISMedia.

For many students and their parents, a college education is a top priority. With education costs continually rising, paying for a degree may seem difficult or impossible. Some parents consider using their homes equity to obtain funds for college but arent sure if that would be a wise move.

Benefits of Using Home Equity for Higher Education
Home equity can be easier to access than a traditional loan. To obtain an educational loan yourself, or for your child to obtain one, a lender would require a lengthy application and credit check. If you already have a mortgage and make payments on time, you may find it much easier to secure a home equity loan. If you already have a home equity line of credit, you can simply write a check to your childs university.

Federal student loan programs limit the amounts that can be borrowed each year. If your child will attend an expensive university, you may not be able to borrow enough to cover the entire cost. Meanwhile, your mortgage lender may allow you to borrow up to 90 percent of your homes equity.

Interest rates on home equity loans are generally lower than rates for loans offered by the federal government or by private lenders. The lower interest rate can make a home equity loan the most attractive option if you need to borrow to finance your childs education.

Danger of Using Home Equity
Using home equity to pay for a childs college education is very risky. If you suffered a financial hardship, such as a job loss or unexpected medical bills, you could have limited options to modify or delay your home equity loan payments. Using your home as collateral means you could lose it if you failed to repay the loan. On the other hand, if your child took out student loans, options such as forbearance, deferment, and loan forgiveness could be available to help in tough financial times.

Other Ways to Pay for College
A variety of grants and scholarships are available from universities, community organizations and businesses to help cover the costs of higher education. Your child could work part-time during the school year and work part-time or full-time during the summer. Another option is for your child to attend a less expensive university, at least for a year or two.

Think Carefully Before Tapping Into Your Homes Equity
Using your home to help cover the cost of college may seem like a good idea. While a home equity loan or line of credit can be easy to obtain and can have favorable interest rates, make sure you fully understand the risks. If you suffered a hardship and couldnt repay the debt, a mortgage lender would be less forgiving than a student loan servicer, and you could lose your home. Think things over carefully and explore other sources of funds, as well as the possibility of your child attending a different institution.

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

Published with permission from RISMedia.

More space is one of the must-haves of just about everyone looking for a home, but if you happen to have a home on the market that has tiny rooms, it doesn’t mean there won’t be any interest in the property. It just means you may have to do some things to jazz it up.

A small room doesn’t necessarily translate into an uninteresting room, and there are numerous design tricks you can take advantage of to make it more eye-catching, starting with clearing it out as best you can so clutter doesn’t get in the way.

It’s a good idea to create a singular focal point in the room, such as adding a colorful pattern to the bed in a bedroom, setting a dining room table as if you’re having a lavish dinner party or adding a comfortable chair in the living room. The idea is not to have too much furniture around these items so they appear larger than they are. Having one large painting as opposed to several on the walls is also better for aesthetics.

Light will enhance a room and can make it appear larger than it really is. This doesn’t mean, however, that you want to add a bulky lamp that takes up too much space. The less items clamoring for attention, the better.

Use light and bright colors throughout the house. Icy blues and cream colors are lauded as the best color combinations that can really make a tiny room seem bigger. Conversely, heavy, dark colors absorb light and can make a small space seem even smaller. It’s all about illusion. Light and brightly colored walls are more reflective, making a space feel open and airy.

Consider adding mirrors or glass to a room to also help with size, as they give an impression that a room is larger than it really is.

When it comes to a small kitchen, keep things organized in cabinets and not laying around on the counters. Smaller chairs or stools are also better, as is a round table instead of a square one.

A small space doesn’t have to mean less interest. With the right design, furniture and color usage, a small room can leave a big impression.

Published with permission from RISMedia.

Most people who want to purchase a house cant afford to pay cash and therefore need to take out a mortgage. The type of loan you choose will depend on your financial circumstances and plans and can have a significant impact on your monthly costs, so its essential to understand all your options.

Government or Conventional?
The federal government administers several programs to help homebuyers in specific circumstances. The Federal Housing Administration offers loans with down payments as low as 3.5 percent for first-time buyers. The U.S. Department of Veterans Affairs provides loans for current and former servicemembers that require little or no money down. The U.S. Department of Agriculture offers loans for people to purchase homes in rural areas.

If you dont qualify for a government-backed loan, you may be able to secure a conventional mortgage through a bank, credit union or private lender. Since conventional loans arent insured by the government, they are riskier for lenders. Youll need a better credit score to qualify and likely need to put more money down.

Fixed-Rate, ARM or Balloon?
Youll also need to decide whether a loan with a fixed or adjustable interest rate is better for you. A fixed-rate loan can help you plan for the future since youll know exactly how much your mortgage payments will be. That predictability can be extremely valuable if you have or plan to have kids and need to save for college and retirement.

An adjustable-rate mortgage (ARM) will have a low introductory rate, and then the interest rate will periodically adjust based on market conditions. If you have a relatively low income now and expect it to rise in the future, an ARM may be a good choice for you. An ARM may also make sense if you plan to live in your house for only a few years before moving.

The term of the loan is another important part of the equation. A 15-year mortgage will have higher monthly payments than a 30-year loan, but a 15-year loan will have a lower interest rate, which means youll spend less money on interest payments over the repayment period.

With a balloon mortgage, the homeowner makes monthly payments over a period of five to seven years, and at the end of that period, the remaining balance comes due. A balloon mortgage will only make sense if youre absolutely certain that youll sell your home before the balloon payment is due. If you dont, refinancing may not be possible, depending on your credit score, income and the value of the house at that time.

Select a Mortgage Carefully
Buying a house is likely the biggest financial move youll ever make, so choosing the right mortgage is critical. Think about your current and future financial picture, conduct research, compare terms offered by different lenders, and use online calculators to figure out how much youd pay in a variety of scenarios.

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

Published with permission from RISMedia.