Dallas, TX (PRWEB) April 5, 2009
Urgent warning to homeowners from Ed Fussell, SVP at Mercantile Mortgage, that the "layoff-downsizing" season is upon us and it's imperative that homeowners "hatch" their home equity nest eggs while they still can.
Unemployment is now at 8.5% and growing. Layoffs are daily occurrences. Workers with the slightest fear of becoming downsizing victims should grab their home equities as soon as possible. The timing is important because once jobs are lost, or even a severance notice issued, no mortgage lender will approve any loan until the applicant gets another job with sufficient qualifying income.
Mercantile receives urgent calls from new and former clients every week requesting to borrow some or all of their home's equity to tide them over because they've been laid off. Applicants are shocked to learn the nest egg they were counting on is not accessible, and consequently, some have no alternative but to sell their homes to get the equity that is rightfully theirs.
Equity nest eggs are further threatened by falling home values. Texas law limits home equity loans to just 80 percent of a home's fair market value (FMV). People that postpone their home equity loans will get less because Texas home prices are falling, causing home equities to shrink every day.
Home equity loans are drying up. Many lenders have reduced the Texas maximum loan limit from 80 percent of the FMV to 75 percent and others have ceased making home equity loans altogether.
Homeowners are universally astounded and naturally furious they can't access their home equity when they most need it, but without documentable income, they can't qualify, even though many applicants have perfect payment histories on their mortgage and other debts, have high credit scores, and lots of home equity.
Smart homeowners counting on their home's equity for a reserve account should borrow now while rates are still at a 37-year low and lenders are still offering home equity loans. Be sure to protect these funds in a safe interest-bearing bank account, accessible when and if it's needed for living expenses, utilities and mortgage payments.
With the economy in turmoil and jobs disappearing daily, it's better to be safe than sorry.
By Ed Fussell, SVP, Mercantile Mortgage Corporation
http://www.MercantileMortgage.com (800) 300 0028 x5 Direct.
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