Homeowners with troubled mortgages and an investor interested in buying bonds are this week's questions for "Ask the Experts." The answers are from certified financial planner Gregory Lucas in Sacramento and investment adviser Jeffrey DeBoer in Roseville.
To see more advice or to ask your own financial questions on taxes, investing, personal finances or wills/trusts, go to: www.sacbee.com/ask.
My daughter was laid off and is collecting unemployment. Her husband is a state employee. Their Elk Grove home is upside down and they don't know what to do. She has great credit, but is thinking about not paying the mortgage and letting the home go into foreclosure. What do you suggest?
I'm a disabled senior having trouble making my monthly mortgage payments. My home is currently "under water." If I walk away, can my mortgage lender go after my two annuities to make the payments?
My answers to both these questions are similar. Whether you're a retiree or a working couple, walking away from a mortgage is not a step to be taken lightly. Before deciding to leave your home, consider that it may be difficult to purchase another home later. It also could negatively affect your credit score.
My recommendation is to first get advice from a loan modification expert. Be warned that homeowners are being targeted by unqualified "experts" offering loan assistance for a price. For this reason, seek the help of a federal HUD-approved housing counselor, such as the Sacramento Home Loan Counseling Center. You may find others at www.hud.gov. If you qualify for a loan modification, it would be a better solution than foreclosure.
As for protecting assets like an annuity, your lender may reclaim the home in a foreclosure, but it usually has no right to your other assets.
Many newspapers used to carry corporate bond tables listing individual bonds, interest rates and prices. Where do I find this information now? I would also like info on California bonds, as well as bond ratings.
There has been a lot of talk lately about bonds, so it might be helpful to review some basics. Bonds are essentially loans. Corporations and governments issue bonds to pay for their ongoing operations or specific projects. When you purchase a bond, you are loaning your money for a certain period of time to the issuer, whether it be a company or Uncle Sam. In return, the issuer promises to pay interest until the bond matures, at which time the loan amount is paid back.
Bonds can help meet a variety of financial objectives: preserving principal, generating income, managing tax liabilities, growing your assets and balancing the risks of stock investments. However, you can also lose money in bonds.
Although the term and interest payments for bonds are fixed, their returns are not. A bond price can fluctuate if not held to maturity. Bond prices generally move in the opposite direction of interest rates.
One helpful website is http://www.investinginbonds.com/. It has educational information on bond investing, news and commentary, as well as links to specific market information and price quotes. You can find all the information you're seeking.
Like any investment, bonds should be tailored to your overall goals, risk tolerance and individual circumstances.
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Compiled by Claudia Buck, ASK THE EXPERTS
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