Mystic Toad Press Blog

Located on the central gulf coast, Mobile is one of the significant cities in the state of Alabama in America. The city is the third most populous city in Alabama. Mobile real estate always had very high demands. Mobile is the center of different cultures. The local culture here is influenced by the French, British, Spanish, African, Creole and Catholic heritage which have made the city an exception among all cities of Alabama State. The annual Carnival celebration is an example of this cross cultural influences on the city. This is a 300-year-old carnival that has evolved from a French Catholic tradition making it a mainstream multi-week celebration with an array of different cultures.

The climate in the city is soothing and comfortable inciting people to acquire Mobile real estate. With a geographical location on the Gulf of Mexico, the city enjoys a mild subtropical climate, with an average temperature of 67.5 F (20 C). Through out the year the maximum temperature remains 910F (330C) and the minimum is 400F or 40C. The summer here is humid and hot while the winter is wet, as the city experiences the highest average rainfall. Snow fall is not very common in the city while it has average 59 rainy days every year.

Mobile real estate comes with facilities like schooling, transport and industry. For any job, residents do not have to go far away from the city. The city is an attraction for the tourists. In every nook and corner, you will find some or the other kind of entertainment. With all the facilities, the real estate industry has become a booming industry in the city. So look out for all the latest housing projects that are coming in Mobile. We are sure you won’t be able to control the temptation of buying your living space in Mobile.

No bubble-bursting is in sight for real estate sales in this new year of 2006. This is now expected to be the second best year in history for residential property sales, according to analysts at the National Association of Realtors. “Home sales are coming down from the mountain peak, but they will level-out at a high plateau - a plateau that is higher than previous peaks in the housing cycle,” said David Lereah, NAR’s chief economist. “This transition to a more normal and balanced market is a good thing.”

Even though mortgage rates have edged downward in recent weeks, they will generally trend upward during the year, probably to about 6.6 percent for a 30-year, fixed-rate mortgage, NAR predicts. Existing home sales, expected to reach about 7.1 million units in 2005 (when final figures are available), will probably decline a bit in 2006 - perhaps by about 3.7 percent to a volume of 6.84 million units. New home sales will be about 1.29 million units in 2005 and will probably drop by 4.8 percent to 1.23 million units this year. That would make this year the second best on record for new home sales.

“The housing market still is fundamentally healthy,” said Dave Wilson, president of the National Association of Home Builders. “Many builders sense some tapering off of buyer demand because of resistance to high prices and rising interest rates, and many companies have begun offering certain incentives in order to maintain their sales and production.” Confidence of home builders during December slid from its summer peak, yet remained well within the positive range, according to NAHB.

Thomas Stevens, NAR president, made this comment: “Housing has always been the soundest investment for most families. As the old saying goes, homeownership beats the heck out of a drawer full of rent receipts.

Copyright 2006 TheLowQuote

Jim Woodard Syndicated real estate columnist and feature writer
Mortgage / Real Estate Update Report

http://www.TheLowQuote.com

Anton Pankev, Director of “Address Project Consulting”
Mr. Pankev, who do you offer your big projects for real estate in Bulgaria? Who is interested in them?

- If we are talking about holiday projects, the clients who buy mostly are British and Irish. The main reason is the price - the average price varies between EUR 750 and EUR 900 per sq.m., although in elite resorts like “Slunchev den” (”Sunny day”) they reach EUR 2400/sq.m. These are reasonable and low levels, especially when once take into consideration the quality and characteristics of the properties we offer. Most of the projects in Bulgaria are with swimming pools, fitness, spa-center etc., which means - everything necessary for a holiday in one place. This impresses clients, because they invest and know that such an investment will bring them a high profit. If they want, they can sell the apartment with a profit after two or three years. But their main goal is to rent it. And those who have been there like Bulgaria, the nature, the food, everything here.

Is it difficult to sell such type of property?
- They are bought a lot at present, and if the deal will be concluded easily depends on several external factors. Thanks to our long experience in the market we have learnt to build trust with the client and when we are able to reply to each question, I wouldn’t say it is difficult. If you win a client who has four good friends, and if you reply the questions of the first one, the others say directly which property they want. Each detail has to be specified in advance. The information itself is extremely important. Everything should be clear and no surprises to rise forward.

How far Bulgaria is competitive with the quality and prices it offers?
- I definitely think that Bulgaria is quite competitive when there are so many clients that buy a property. If we are talking about the prices in Turkey, Cyprus and Spain, they are quite higher than Bulgarian ones. In the exhibitions we participate, we notice that the bigger part of the Turkish resorts are more expensive than Bulgarian ones, among which there are some non-furnished. And we offer furnished apartments complex with additional services, which the owner can use, and this is the way we win clients. This practice exists in other countries as well, but with the prices we sell, we turn into an attraction.

What should be added to the realized projects, in order to become more competitive?

- The infrastructure should develop further. It is obligatory to develop airports and golf-terrains. Both are foresee in Bansko, as well as at the Black Sea. There should be built a great service level and everybody have to work over it.

Buying property in paradise is not quite the same as buying a home in the Midwest. There are many factors to consider when buying a home on the Big Island of Hawaii. This article will help you along your path to your dream home.

Here is a list of things you should consider before you contact a Real Estate Agent on the island. We’ll discuss each one of these items later on.

• Do you want to live on the wet side or the dry side of the island?
• How far away from the big cities do you want to live?
• What type of construction do you prefer?
• Fee Simple or Leasehold?
• Do you want a view? If so, ocean views or mountain views?
• Price range you can afford?
• Specifications of the home you want?
• How many beds/baths?
• Square footage wanted?
• Older or newer home?
• Size of lot?

Take the list above and try and answer as many as you can before proceeding. If you can answer them all you are doing well! Now let’s discuss each one of these.

Do you want to live on the wet side or the dry side of the island? This is a pretty simple straight forward question. Hilo is on the east or wet side of the Big Island and gets about 140 inches of rain a year. Kona is on the west or dry side of the island and gets about 15 inches of rain a year. The wet side is green and lush and in constant high humidity. Whereas the dry side can be hot and dry and quite desert like. Also, consider the elevation in which you want to live. The higher the elevation the cooler the days and nights. And nights can be quite chilly. Some homes require wood burning stoves.

How far away from the big cities do you want to live? The closer to the big cities of Hilo or Kona that you want to live the more expensive the homes and land get. Traffic can be bad in and around the cities. And of course privacy is less around the big cities. So you need to decide how far away from the big cities do you want to live? Some areas of Hawaii can be quite rural (True country living at its best) and as far away from civilization as you’ll ever want to be. Markets can be a 20 mile drive and medical facilities can be 20-40 miles away. This is something to decide before you begin to look for your new home.

What type of construction do you prefer? Most people don’t care, but there is a difference and both have advantages and disadvantages. The traditional type of construction is post and pier. The newer type of construction is slab and footing which is how most homes on the mainland are constructed. Post and pier construction is a home that is raised up off the ground like on stilts. I have heard and read two different explanations for this type of construction. One explanation is cooling. By raising the home off the ground the heat is blown out from under this type of home by the trade winds. The other explanation I’ve heard is that it helps to keep bugs and vermin out of your home. And it makes it easier to figure out where they are getting in and to close off their access. I am not sure which reason is correct or if both are correct. The downside to post and pier is that your house is not anchored to the ground so if a hurricane were to hit (very rare in Hawaii) you have a better chance of losing your home. Also, you will feel earthquakes with more intensity in this type of home. Concrete slab and footing construction is becoming the norm on the island these days. The only real downside to concrete slab construction is cooling. I have heard that concrete slabs can remain warm and can heat your house. This can be a good thing if you live in a cooler climate or a bad thing if you live in the more desert like environment.

Fee Simple or Leasehold? Fee Simple means you own the land the house sits on. Leasehold means you buy the house but not the land. You will have to pay the monthly lease payments to the landowner. There is not much downside to Fee Simple. But there may be an advantage with Leasehold for those who don’t have much money and want to buy in Hawaii. I have heard stories of savvy individual buyers who negotiate the price of a Leasehold home way down (because they can be hard to sell). Then save their money while living there and are able to buy a Fee Simple home within a few years. Though I am not sure this would work out in today’s market.

Do you want a view? If so, ocean views or mountain views? Most people want an ocean view. But can you afford it? Mountain views can be just as stunning and much less expensive. Having no views in Hawaii is hard to find but some people prefer it that way. Either way the old adage “Location, location, location!” really applies here.

Price range you can afford? Only you can answer this question. Just be reasonable and stay within your means. Don’t be willing to buy more than you can afford because you fell in love with a place. You will regret it later and may have to sell it because you cannot afford it. Before you settle on your price range see the section below titled “Other things to consider”. Some things could affect your affordability factor.

Specifications of the home you want? How many beds/baths? Square footage wanted? Older or newer home? Size of lot? Let’s face it, everyone would love to have a huge estate on 40 acres, right? Get ready to downsize. An average size home in a lower price range can be 800sq.ft. to 1,200sq.ft. Smaller size homes are the norm on Hawaii rather than the rule. Don’t get me wrong, if you have the money you can find plenty of large homes. An older home can be trouble if you are not careful. As always, do your homework when buying any home. Make sure to get the home inspected and have a termite inspection as well!

• What lava zone is your potential home in? The United States Geological Service has a lava zone map and has defined these zones as 1 through 6 with 1 being likely to see another lava flow and 6 not so likely. If your house is in zones 1 or 2 your home insurance will cost more, period. You need to do your homework before you buy a home in one of these zones.
• Most lenders on the mainland will not provide a mortgage for a home in Lava zones 1 or 2. Some won’t, even if your home is in zone 3. If your home is in zones 1 or 2 you will probably only be able to get a mortgage through a bank in Hawaii. Because you will be going through a bank you can expect a % to % higher APR. But since you are in lava zones 1 or 2 you can expect an additional 1% (approx.) higher APR.
• Is the home permitted? A lot of homes on the island have been built without permits. Are there other structures on the property? If so were they built with permits? Be careful about buying un-permitted structures.
• Buying land and building your own home. Unless you are going to build the house yourself, there is no longer much of a price advantage to doing this.
• Some homes are not hooked up to electricity. Always ask if the home is on or off the grid.
• Some homes are not connected to the city water system. If this is the case you catch your own rain water and will have a large water storage tank on your property.
• Your home may use a cesspool if not connected to the city sewer system.

Now go out and interview numerous Real Estate Agents! Find the one that you feel will be able to help you the most. By knowing exactly what you want and what you can afford you will help your Real Estate Agent help you find the home you are looking for. And it will save them a lot of time by having the answers already to the questions in this guide. Also, it will show them that you mean business and you will get more of their time than someone who is undecided about what they want and where they want to live.

David Brilliant owns and operates The Kona Forum http://konaforum.com, An online resource for people who want to visit and/or move to Kona and the Big Island of Hawaii. He also owns Da Kine Website Design http://dakinewebdesign.com and Da Kine Web Hosting http://dakinehosting.com providing Hawaii with premier website design and web hosting services. You can e-mail him through any of these websites.

I get asked all the time about housing as an investment, and as
I talk with people it is amazing how differently people look at
it. Forget investment property for the moment and consider how
we should evaluate the investment performance of our own homes.
I am surprised how many people don’t know the difference between
“enterprise value”, which is the sales price of a home (debt
plus equity), and “equity value”, which is what is left at the
end of the day when you sell your home and pay off the mortgage.
In determining whether this was a good investment for you, it is
only the latter calculation that matters.

Most people simply look at how much the value of their home has
appreciated since they bought it, and compare it to what they
paid. Let’s say someone bought a home for $500,000 a year
earlier and their neighbor’s identical home just sold for
$550,000. Simple math would suggest a potential 10% return in
one year (a $50,000 profit on a $500,000 purchase). This, while
straightforward, is not an accurate calculation for several
reasons.

First, it is critical to factor in transaction costs on the sale
of your home and deduct them from the gross sales price to see
how much of the sales price you have left. These include what it
might cost you to prepare the house for sale (painting,
landscaping, staging in some cases, etc.), as well as real
estate commissions and other transaction related costs. Let’s
say in our hypothetical example our seller would invest $10,000
in sprucing the place up for sale, and the real estate
commission plus other closing costs on the hypothetical $550,000
sale might be another $33,000 (say 6% of the sales price). Thus
that $550,000 sales price results in only $507,000 after these
transaction-related costs, implying a mere 1.4% return ($7,000
profit on a $500,000 purchase price), right? Wrong again.

To calculate your investment return you need to compare your
profit (or loss) to the equity you have invested, not the entire
home price. Let’s say you put 5% down to buy the home, which
equated to $25,000. Your $7,000 profit in this case actually
represents a very attractive 28% return on your investment in
only one year. One way smart homeowners can increase their
returns is to appreciate how much the return on their invested
equity can be enhanced by saving say 1% in the agent’s listing
commission. In the example above, a 5% sales commission vs. 6%
would have increased our hypothetical seller’s return on their
$25,000 of equity investment from the 28% we just calculated to
an astonishing 50% ($12,500 profit on the $25,000 investment).

A couple of basic takeaways from this: First, make sure to
factor in all costs of a transaction. Second, understand the
difference between the aggregate home value and the equity you
have invested in the home, which is what impacts your true
economic return. Third, appreciate the impact sales-related
costs can have on your return. While a $5,000 commission
difference seems relatively insignificant in the context of a
$550,000 home sale, it is VERY significant in relation to the
equity investment in your home, which is the basis of
determining your return on your investment.

Every home improvement situation is different. Still, there are
some general points that apply to most projects.

Some General Points

When all the woodwork in a house is the same color (cream,
white, and off-white work easily), spaces tend to visually “flow
smoothly” even if the walls of rooms are different colors. Make
sure you don’t break this rule.

The colors of all rooms, which can be seen at the same time,
should look good together. Let’s take a typical center hall
floor plan for a modern two-story house. The living room and
dining room are to the right and left of the entrance. The foyer
goes straight back to the family room, breakfast area, and
kitchen across the back of the house. There is probably a deck
opening off that area. Some part of all those areas can be seen
from each room, and the foyer walls continue upstairs to a hall
from which each bedroom is visible.

To continue our example with cream woodwork, the foyer and halls
might be painted a pearl gray, light tan, soft gold, or deeper
cream. The woodwork is probably a gloss or semi-gloss and the
walls and ceiling a flat paint. Since ceilings reflect light
down on people, they’re usually best in cream or off-white. I
once saw a dining room with an indirectly lit octagonal tray
ceiling painted to look like creamy clouds in a peachy sunset
sky that made every dinner guest look like he or she had a
perfect complexion. It was wonderful.

The living room opening off our foyer might be a solid color
(maybe sage green or deeper tan) or it might look very handsome
with a vertically striped wall paper (cream and gray, cream and
green, or cream and tan are good possibilities). The dining room
is apt to have a chair rail. A darker color could look good
below the chair rail (again sage green, gray, gold or tan would
work) with a lighter tint of the same color above. If a solid
color were chosen for the living room, the dining room could
handle a deep red below the chair rail and a cream paper with a
narrow red stripe above it. Lots of crystal and mirrors would
look terrific in a room like that.

I’m sure you get the idea. Today’s open floor plans make it
important that rooms work together.

A recent front page article in The New York Times noted that “the devastation from Gulf Coast hurricanes is serving as a strong reminder that possible disasters could lay waste to cities and states across the country.” Fortunately, environmental hazards are not uniformly distributed across America; many attractive locales are relatively safe.

Warren R. Bland, professor of geography at California State University, Northridge and author of Retire in Style: 60 Outstanding Places Across the USA and Canada, has prepared a list of ten U.S. places that are unusually safe in terms of potential exposure to five major environmental hazards. He considered degree of potential exposure to flooding due to hurricanes and tsunamis, as well as threats to life and property from earthquakes, tornadoes, radon gas, and air pollution. All ten places have a zero chance
of catastrophic flooding from hurricanes and tsunamis, and in all ten the dangers from earthquakes, tornadoes and air pollution are in the zero to low threat range. Only radon gas, an often overlooked threat to health, is so widespread across America that it poses a significant risk, if unabated, in five of the ten environmentally safest cities and towns.

Dr. Bland’s top ten environmentally safe places are: Austin, Texas; Fredericksburg-Kerrville, Texas; Pinehurst-Southern Pines, North Carolina; Prescott, Arizona; Colorado Springs, Colorado; Eugene, Oregon; Ithaca, New York; Portland, Oregon; San Antonio, Texas; and Tucson, Arizona.

Barbara Kimmel is an award-winning book publisher, publishing consultant and publicist. She is the publisher of Warren Bland’s book, Retire in Style 60 Outstanding Places Across the USA and Canada. Books are available through all major bookstores, at Amazon.com or direct from the publisher at http://www.nextdecade.com

Having recently learnt that the decision has been made not to offer the tax benefits associated with putting residential property in SIPPS, it is worth reminding ourselves of the long term objective of property investment.

Regardless of whether you put residential property into a SIPP, you should remember that on average, historical figures show that property doubles in value every 10-15 years. So if someone said that you could double or even triple your money in some cases, even if it took longer that this, then you would still consider investing wouldn’t you even if it wasn’t within your personal pension. Plus, you can still put commercial property into a SIPP so you still have the opportunity of mixing your investments which every good property investor would be doing.

How to make £166,500 in 15 years

According to research from the Centre for Economics and Business Research (CEBR), the average cost of a home in the UK could be £300,000 by the year 2020. Currently that figure stands at around £157,000 in 2005 which represents an increase over the next 15 years of 91%.

This figure of £300,000 is achieved by the economic forecaster basing its prediction on the ever increasing population compared to a slower production of house building. As with many commodities, it is the result of lower supply and higher demand that will push up these prices.

With buy to let residential investment property, the maximum loan you can apply for is 85%. Based on an average value property in 2005 of £157,000 this would require you to put down a deposit of 15% £23,550 subject to valuation and rental cover which can vary between 115% to 130% in most cases.

Potentially over the next 15 years, this one investment could realize a return of £166,550. This is based on selling the property at £300,000 less the loan of 85% of the property value in 2005.

Over previous years there have been times when property has declined in value and other times where it has signifcantly increased in value but a good property investor will clearly see the benefits in both a rising and declining market and will utilize the facilities of a good buy to let mortgage provider to assist in this.

For example:

During a rising market, a property investor may decide to use this window of opportunity to release some of that equity realized in the value of the property, to use for additional property investment. However, the property investor is less likely to use that capital released during a rising market. Instead, the landlord will wait until the market has re-stablised itself or experiencing a decline. At this point, they will then use this window of opportunity to purchase lower priced property and the circle continues. That is why property investors are in it for the long term and why they see the market as being profitable to them in all conditions. And when you consider that property prices only need to increase by an average of 4.4% year on year, it is easy to see why this type of investment is so achievable.

Successful property investors will do a lot of research on areas that they believe will become property hotspots and areas which are less likely to perform. There are many areas experiencing high levels of growth and financial investment with a lot of regeneration programmes in place or planned in the future. Even by simply monitoring publications such as Construction News can give a good indication of where new commercial premises are being built which can be a good indicator of new businesses moving to the area which it turn can lead to an increase in demand for property locally.

It is the general consensus that interest rates have stablised and there is even speculation of a drop but either way, they have been steady for a good number of months now. Slower capital growth does result in buyers having to put more effort into managing and developing their portfolios. And more importantly making a profit from property. Buying property at discounted prices can be done but you must do your homework to make sure they are genuine discounts and incentives. And don’t forget that in a slowing market, vendors will be more likely to listen to your offers. Albeit if they are a bit cheeky. In particular, you can use the negative press that is often surrounded by the property market to your advantage. For example when the media are circulating stories of a dropping property market, then vendors are even more keen to listen to your offers.

How to Get Started in Buy to Let

• Do as much research as you can. You can even get some free publications including Free Buy to Let Guides. Click Here for more information.

• Find out what properties are selling for. A good way of doing this is by contacting estate agents and researching on the internet. A good way is to look at property house price websites.

• What is the level of demand for rental properties in the area.

• What type of property is most in demand. For example, if it is a university city, then the demand for shared student accommodation may be much higher than property for professional sharers.

• Find out what rent is being achieved on those properties and the likely time to get the property let out. Speak to letting agents and local businesses that may be letting properties already in the area.

• Raising deposits for your investment properties, may be easier than you think by releasing equity from any of your existing properties.

So how Do you know if you have bought a good investment

Well there is always an element of risk but providing you follow the main logic you should eliminate most of them. It is also important to make sure you continue to review your buy to let mortgage funding on a regular basis as this can have a big impact on your success and cash flow. As we have said above, the property market can rise as well as fall so providing that you have some cash funds in the bank to help you through any tougher market conditions then you could reap the rewards in years to come. But it’s important that you calculate these carefully into your projections to ensure that whatever funding you may need to input into the investment property that it will be outweighed by the eventual gain.

Providing that you are buying a good quality property in a good area with strong rental demand then it’s worth considering. Don’t just buy a property because it is cheap. You might buy a property at a very discounted price, but if you can’t let it, you could find yourself covering the buy to let mortgage payments for months to come which will see a big dent in your profits. Find out why it is cheap. Is there an increase in crime in the area, have plans been submitted for a large industrial unit to be built behind the garden etc, etc. Do your research. And don’t be afraid to develop a property for profit. Buying at the right price, in the right area and doing the right renovation on the property, can also see you return a decent profit. Re-financing the property on completion and letting it out could give you the best of both worlds.

Having taken into account all the considerations above, to calculate if it is a good investment, you need to ensure that your annual rental income exceeds the cost of your monthly buy to let mortgage repayments and maintenance costs. And it is more likely that your annual rental income will be stronger if you select an investment property in area with a strong and growing rental demand as it is less likely that you will experience rental voids and be supplementing the monthly buy to let repayments.

So in conclusion the property market is likely to remain a prime choice for property investors as long as they are will to commit to the long term.

Jennifer Tweed is the founder of buytolet4sale.com, one of the UK’s first property portals dedicated to all types of investment property for sale and everything you should need for your sale and purchase. Learn more about buy to let.

What could you do with $10,000? Well, you can have it, now in a new home equity loan! Did you know that if you have been in your home for just one full year, you may already have the opportunity to take out huge dollars in equity from your home — tens of thousands, even! Did you also know that you can get this money with no closing costs, use it any way you like, and, best of all, it will cost you as little as the price of your cable bill each month, and you can create an amazing money cycle that will give you an endless supply of cash.

Unlike conventional mortgages, home equity loans are paid back with interest-only payments, and have no taxes or insurance added, which make for extremely low payments. This means you can get tens of thousands of dollars for as little as $33 per month on your equity loan. Imagine having 10,000 dollars and paying this little to get it!
What’s more, if you use this equity properly, you can pay off debt, saving hundreds monthly. Then, in a few years, you can get a new home equity loan, with the new equity you have built in your home from simple appreciation in value.

A real-life home equity loan example. . .

Here’s a great story about the power of equity. I had a client once, who was going to sell his beautiful home, which he loved, because he needed money for his daughter’s college education. Little did he know that the money was right at his fingertips, locked away in the vault inside his home. All he needed was the right combination to get it out. When I showed him how he could get a $50,000 home equity loan for less than $180 per month, he was astonished. “I figured it would be like a whole new mortgage,” he said. You know, around $500 per month, and I could never afford that, on top of my current mortgage payment.”

The Money Cycle. . .

He was even more excited when I taught him how to pay that loan off later, using his house again, while taking even more money. This is what is called the Money Cycle. Your home equity loan can create this never-ending cycle.
Imagine paying off a car, a credit card and another loan, all at high interest with combined payments of over $600 monthly. Your home equity loan payment is $180, saving you over $400 per month and $5,000 yearly. Now, instead of spending this extra cash, what if you go to your financial planner and have him invest the money for you? Suddenly, you’re building wealth and creating cash flow. Now, in a few years, your home appreciates, and you either sell or refinance to a new loan, getting more cash and starting the cycle over again. Learn all about it in the wealth-building system, Winning the Mortgage Game.

Mark Barnes is an investment real estate and real estate finance expert. Get his free mortgage finance course at http://www.winningthemortgagegame.com and also learn how to gain financial independence through proper real estate investment strategies. Mark is also the author of the new novel, The League, a shocking, sports-related conspiracy. Learn more about his suspense thriller at http://www.sportsnovels.com

There are some myths about foreclosure, bankruptcy and credit. If you don’t have the facts, it’s impossible to make the best decisions. Take time to learn about foreclosure, the potential impact on your credit, and some steps you can take if you’re facing foreclosure.

Many people think that once they’ve settled a debt - no matter how that comes about - the impact on the credit report is negated. That’s not true and your decisions will remain a part of your credit history, probably for seven years. That means that your decision to enter foreclosure will be there for every potential creditor for many years, impacting your ability to obtain credit.

Foreclosure is only slightly better than bankruptcy. Some people call bankruptcy a “clean slate.” In truth, a bankruptcy will likely remain part of your credit score for even longer - usually ten years.

Foreclosure situations don’t happen overnight. Most people struggle for months (or longer) before the final straw. Often, payments are a little late at first. As the mountain of debt grows, payments are later. Late charges rack up, making it more difficult to catch up. One of the most important steps you can take to avoid foreclosure happens now - well before you’ve even considered foreclosure as a possibility.

Start by making every attempt to make your payments on time, every time. If you see that a payment is going to be late, contact your finance company. Though it’s usually tempting to avoid the phone calls that accompany late payments, be proactive. Let the company know that you’re having a problem and look for some options. Some finance companies will allow you to pay interest only on a payment, tacking the principle onto the end of the note. This isn’t a long-term solution that should be taken at the least sign of a problem, but could be the answer to getting your finances back on target.

If foreclosure seems to be looming, consider finding a credit counselor. You don’t have to pay a fortune for the service - you’re already facing financial problems. There are non-profit counselors who offer services free or for minimal fees. These can sometimes negotiate payment arrangements instead of foreclosure.

Jeff Lakie is the founder of Foreclosure Resources a website providing information on Foreclosure