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Affordability becoming an issue for first-time buyers in Florida

A recent study conducted by WalletHub suggests that first-time homebuyers in South Florida face a large number of obstacles when it comes to purchasing a house.

The main factor standing in their way is affordability. The median price for a single-family home has topped $300,000 and is continuing to increase. Even with a down payment of 3.5 percent and programs to help people with less than sterling credit, closing on that first-time home can be daunting for a young family just starting out.

Affordability isn't just an issue at signing

However, closing is just the beginning of the challenge. A 30-year mortgage or even a 15-year one is quite a commitment. You are betting that your financial situation will be stable enough that you can meet your payments every month for many years. With the national economy being in the shape it is, that commitment comes with some risk.

Let us suppose that you run into problems, such as a period of unemployment or a severe illness. Then you will likely face a number of tough economic choices, such as putting food on the table versus paying credit cards. You may find yourself getting behind in your mortgage payments. At a certain point, the bank or lending institution will probably start threatening to foreclose if you don't somehow get current.

How do you get out?

Should you find yourself in a sticky situation, bankruptcy is one route that you could pursue to get out of the bind you find yourself in. If you are interested in keeping your home, the best option may be Chapter 13 bankruptcy.

Chapter 13 bankruptcy is best when you have an income, but your debts are too large for you to keep current. The idea is that you reorganize your debts so that you can pay them off with reasonable monthly payments over a three- to five-year period.

One significant advantage of Chapter 13 is that the moment you file a petition, foreclosure proceedings stop. However, it is imperative that you file before the bank or lending institution forecloses, or else you could lose your home.

You will still have to pay your mortgage after the Chapter 13 petition is discharged, but since your other debts will be reorganized and possibly reduced, you should be in the position to do so. During bankruptcy, you can also work with your lender to modify the terms of your loan to something that may be more agreeable for both parties.

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