What’s worse than a low appraisal with a mortgage? How about losing your job.


Appraisals coming in lower than the home owner estimated is not uncommon these days…most of time, the transaction may still work outdepending on if the mortgage has to be repriced due to higher loan to values or if the home owner wants to bring in additional cash to apply towards their home equity to lower their loan to value.  They at least have options.  

I have lost more transaction to clients losing their jobs or having their hours cut back.  It's really sad to see people who have dedicated years of their life to a company to be dismissed and to add insult to injury, they're most likely not able to obtain a much needed lower rate through refinancing.  They can try contacting their mortgage servicer to see if a loan modification is possible–results vary.

Friday the Jobs Report comes out this Friday and it's weighing heavy on my mind.  How many hundreds of thousands of Americans will be join our millions and millions of unemployed workers.   With an unemployment rate of 9.5%, I think it pays to ask yourself "what would I do if I were laid off tomorrow?"  Nobody expects it, but in this climate, we have a 1 in 10 odds of losing our jobs (hopefully Friday's report will show improved figures).

I strongly encourage you to consider this and to make sure that you have an emergency reserve fund with at least 3 months of your living expenses set aside.  Do you know how much it cost for you to live one month?  Add it all up and review your budgets–how would your spending behavior change if you knew your paycheck might be ending.

I also recommend that after you have 3-6 months of living expenses put away in a safe spot that you look at your credit cards.  What are your current interest rates?  Has the bank recently jacked up your payment percentage?  I do not recommend closing them at this time–should you wind up being unemployed, you might need to rely a bit on the cards (ugh, I hate saying that).

And remember just about everything is temporary.  Should you wind up unemployed…things will get better eventually.  Blemished credit will recover and jobs will come back.  

I've just always been one to plan for the worse and expect the best.

NOTE (added after publishing the post):  I recommend that if you are employed and have benefits (such as insurance) that you take advantage of them sooner rather than later.  Schedule appointments with your dentist, doctor, etc. and get your check-ups. 

To try to end this post on a light note… how about some comedy from Abbott and Costello.  You can always get a job as a union loafer.

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