Once again we are revisiting the issues of mortgage debt, but not just in terms of the risk of foreclosure. Mortgage debt can sneak up on anyone, especially those buying a home. Not only are some states more costly in terms of closing, but they risk of foreclosure is higher in markets where getting little house for your money spent is common.
Did you know that Texas is one of the states with the highest closing costs? On average, closing on a mortgage in Texas will cost you about $4,600, only second to the state of New York! The national average for closing costs is about $1,000 less, which is actually about 7% less than this time last year.
While this may not seem significant at first, think about how closing costs can affect someone suffering with mortgage debt. First, these fees may have exhausted all extra cash, leaving the homeowner vulnerable if financial hardship strikes. Also, refinancing may not be an option for these mortgage holders and the chances they can afford to shell out another $4,000 to avoid foreclosure is small.
Staying Out Of Trouble
Although you may not be able to avoid the high closing costs of your state, you can still minimize your risk of mortgage debt troubles by shopping around. Few people actually shop lenders before applying for a mortgage loan. This is a costly mistake. A good rule of thumb is to obtain at least three mortgage loan estimates before deciding on a lender and entering into a contract on a home. Look for the lowest, fixed rate on a loan with flexible payment terms and minimal penalty fees.