Even though financial gurus have been assuring us that the worst of the financial crisis is over, foreclosures of family homes don’t seem to be slowing down. According to Realty Trac, more than 1.1 million homes in America are currently in some phase of the foreclosure process, and as we reported in a recent blog post, foreclosures in New Jersey are still on the rise.

For most of us, our homes are our most important and most valuable financial asset. And home ownership in general creates more than just financial security. It can also give us our most fundamental sense of place and belonging. Therefore, foreclosure is often the worst possible scenario that an individual or family may face. That is why making sure that your mortgage payment is actually affordable within your budget is of critical importance. 

According to CNN Money, 50 percent of Americans have higher rent or mortgage payments than they can afford, and 76 percent live from one paycheck to the next. Making sure that your house payment fits comfortably within your budget is the best defense against future foreclosure. It is also important to understand that this amount includes more than just the mortgage payment. Homeowners’ insurance and property taxes should also be included in that calculation. And, remember to save budget room for savings and emergencies.

Those who find themselves in the unfortunate situation of facing home foreclosure should talk to an attorney who understands issues like debt collection, bankruptcy and other consumer finance issues.

Source: Wall St. Cheat Sheet, “Does your home fit your budget?” Erika Rawes, May 19, 2014