Homeowners who didn't have money saved up for a rainy day were twice as likely to be involved in a foreclosure than those who saved..
Chicago, IL (PRWEB) March 19, 2013
The Federal Savings Bank echos a recent study from the FINRA Investor Education Foundation on Americans who aren't saving their money up for a rainy day which could threaten their mortgage. To hedge this risk, the bank offers some tips to help avoid mistakes during the mortgage process.
The FINRA study showed that households that aren't planning for the future could be in danger of losing their home and lowering their credit score. Both of these situations must be dealt with to avoid a dangerous financial situation. Having emergency funds t o pay an otherwise late mortgage payment hedges the risk of a low credit score, and in extreme cases, homeownership. Thus, The Federal Savings Bank encourages its current lien holders to save for seasonal periods where they may not be earning income such as a vacation or possible accident. "We highly recommend disability insurance for unexpected times" says Nick a Bank at The Federal Savings Bank.
"The Great Recession and the housing downturn devastated the finances of families across the country," said FINRA Foundation President Gerri Walsh. "Data collected during this period, when many family budgets were stretched past the breaking point, suggest that having a rainy day fund can make the difference between being able to stay in your house and making late mortgage payments and facing foreclosure. That's an important lesson for all Americans, especially as the economy continues to recover."
The study showed that minorities were 52 percent more likely to make late mortgage payments as opposed to non-minorities. Also, dependents a household increased the likelihood of late mortgage payments by 48 percent. Finally, the study also revealed that homeowners who didn't have money saved up for a rainy day were twice as likely to be involved in a foreclosure than those who saved..
The Federal Savings Bank urges First-time applicants to review their finances before taking a loan. While interest rates are low, and mortgage payments may seem affordable, applicants must seriously take into account taxes, utilities, and association fees for a complete understanding of obtaining a property. For information on the mortgage application process visit: TheFederalSavingsBank.com