For a growing number of local homeowners, the often-exciting venture of owning a house is quickly turning sour.
Activist group ACORN released a study Wednesday putting Michigan fifth in the nation for home foreclosures, with Lansing as one of the most-affected cities. Last April there were 102 foreclosures in Lansing; this April, that number jumped to 221.
Job loss and a sluggish economy are atop the list of explanations, but mortgage expert Jim Thelen expands.
"Adjustable rate mortgages-- their rates are adjusting at a larger percent than [the homeowners] used to, up 1 or 2 percent, and they can't always manage it," Thelen says.
Homeowners in Michigan seem to have been especially enticed by sub-prime lenders and adjustable rate mortgages. But those rates can skyrocket-- oftentimes with no notice, leaving the owners unable to make the bigger payments.
"Often the homeowners didn't do their homework, they don't know all the details, they're not listening to their lender-- or their lenders aren't telling them everything," Thelen explains. "You need to have a local lender you can trust."
Even if a person is in danger of losing his or her home to foreclosure, there are things to do to make sure it doesn't happen.
Call your lender immediately, Thelen advises. He says people are often scared to admit to their lenders they can't make their mortgage payments, but alerting the lender first is extraordinarily important. Often the lender can work out ways to extend payments.
"The last thing a lender wants is your property," Thelen says.
And don't always believe what you see online. Certain loans and mortgages may look highly attractive on the Web, but the fine print isn't always clear. Make sure the contract doesn't have any hidden clauses that could make your payments unmanagable.
Decide how much you can afford to pay per month before you visit a realtor or lender. That way, the big numbers they offer you-- what you are approved for-- won't affect your decision.
Thelen says if every homeowner took advantage of fixed-rate mortgages, Lansing's foreclosure rate could see a healthy and much-needed drop.