It’s no secret that many mortgage companies and banks have failed over the past year. It should also be no secret that there will likely be more before this crisis is over.
Don’t assume that your mortgage lender is above the fray. While there’s no need to panic, you absolutely should be saving all of your mortgage statements from this point forward. In the (hopefully) unlikely event that your mortgage company fails, you will want easy access to these records as your mortgage is transferred over to a new lender.
Consider refinancing your mortgage if you can get a rate that is lower than your existing mortgage rate and plan to keep the new mortgage for at least several years. Calculate precisely how much your new mortgage (including points, fees and closing costs) will cost and whether, in the long run, it will cost less than your current mortgage.
Even with the current mortgage problems that are plaguing North America, lenders continue to push home equity loans. While they are not necessarily always bad, these loans should be considered with caution and all of the possible consequences should be weighed before decided to go this route.
Be cautious in taking out home equity loans. The loans reduce or may even eliminate the equity that you have built up in your home. (Equity is the cash you would have if you sold your house and paid off your mortgage loans.) If you are unable to make payments on home equity loans, you could lose your home.