Remember when low interest rates solved so many problems?
Homeowners could refinance to lower monthly payments, easing the monthly debt load and household anxiety at the same time. Lower mortgages allowed families to pay bills not even associated with the home’s principal, interest, taxes and insurance.
We were in that emotional boat many times, including once in the early 1980s when double-digit inflation had us waiting for a home-loan rate of less than 12 percent. When rates came down even more, we refinanced again to make the monthly load even lighter.
However, we were never forced to leave our home because of default or foreclosure; never had to downsize because we couldn’t make ends meet on the housing front.
I can’t imagine the feelings of hurt, frustration, anger and embarrassment of today’s borrowers who are no longer able to afford the roof over their heads — especially for those who knowingly bought more home than they could afford with mortgage money that was way too easy to get.
Just where would we be if today’s interest rates were closer to 8 percent than 6 percent? Consumers have been lulled into thinking "historic" low rates would simply remain and become common — no more peaks and valleys.
There certainly are extremes and stops in between. Our first home, a two-bedroom, two-bath cottage with a sales price of $37,500, carried an interest rate of 9 percent.
While lenders are taking back homes, they are not entitled to the furnishings and other belongings that could have considerable value to the owners.
While there are horror stories from real estate sales persons and lenders describing how upset owners, pushed from their homes by foreclosure, have taken or damaged items that did not belong to them — curtains, faucets, oak toilet seats and light fixtures — most borrowers are humiliated by their plight and pack up without ever estimating the value of their possessions.
In some cases, cash from seemingly worthless belongings can buy you extra time in the home that could bridge the gap between desperation and a permanent solution. Alternatively, a few extra dollars could help with the rental payment for temporary housing or storage.
"I suggest to anyone facing foreclosure or downsizing to have an estate sale before they move," said Cathye Boileau, owner and operator Hannah’s Attic Estate Sales. "They may be leaving their home, but at least they’ll end up with something."
Boileau and other estate sale conductors and appraisers say television programs like "The Antiques Roadshow" have helped to raise the awareness of the possibilities of forgotten or lackluster possessions.
On the show, appraisers travel to several regions around the country to evaluate and estimate the value of consumer possessions. Often, participants are pleasantly stunned by the market value that one of the show’s professional appraisers gives for a specific piece.
While I don’t want to give struggling families the idea that they all have a golden nugget somewhere in a cluttered basement, there is definitely merit in checking every closet and crawlspace for forgotten items packed away long ago. In some cases, you may not even know what you will find.
For example, I grew up with six other siblings in a home that my parents lived in for 46 years. It had an old detached garage with one small opening leading to a dark and dusty attic, accessed only by our neighbor’s huge extension ladder.
We were forbidden to play up there after one of my brothers missed the ceiling joist and stepped through the plaster, sending flying white chunks downward that opened a gash in my head.
When the four older boys left the family home, my folks thought it was time to patch the plaster, paint the garage and remove the aging wooden backboard that supported our basketball hoop.
While repairing the plaster, our friend found an old cedar chest tucked into the corner of the attic, camouflaged by the roof’s cedar decking. The chest, apparently left or forgotten by the previous owner, featured exquisite leather straps and brass buckles that secured its flat top to the trunk.
In the trunk were four woven Navajo baskets that ultimately paid for two years college tuition for one of my sisters.
"I tell people to really look around and not throw away anything," Boileau said. "There could be real value in what they might view as garbage. Old purses, compacts, jewelry, furniture could get them some money that they truly need."
Tom Kelly’s book "Cashing In on a Second Home in Mexico: How to Buy, Rent and Profit from Property South of the Border" was written with Mitch Creekmore, senior vice president of Stewart International. The book is available in retail stores, on Amazon.com and on tomkelly.com.
|Contact Tom Kelly:|
|Letter to the Editor|