As today's housing markets across the country continue to fall, many homeowners are starting to ask what actions they need to take to protect the investment they have in their homes. Actually you have several options to ensure the ability to stay ahead of the declining housing market.

One of the first steps that should be taken is to check with either your city or county property tax office to find out what your current tax assessment is valued. This will tell you what the county or city says your home is actually worth. You should then compare this rate to what your home is currently worth based on current market conditions. It is not uncommon for homeowners in several states, such as in California or Florida, to discover that they are paying more money in property taxes than they should be based on the value of their home in the current market.

In states which have been hit the hardest with declining home values, homeowners are finding that they are paying up to 40% higher property taxes than they should be. If you are not certain what your home is actually worth in today's housing market, it would be a wise investment to have the home appraised to determine its current value. This small investment of a few hundred dollars could easily save two or three time the amount in taxes paid for one year. Taking these two steps will give you a clear picture of your current circumstances and ensure that you are not paying higher taxes than you should be.

If you do have an adjustable rate mortgage it is certainly worth it to consider refinancing your mortgage to a fixed rate mortgage. Before you actually refinance; however, there are several steps which you should take first. Begin by inspecting your existing mortgage documents to determine whether you will be penalized for paying off the existing loan early. While you will be taking on a new loan, your existing loan will be paid off when you refinance it and this could subject you to penalties if your current mortgage contains a prepayment penalty clause.

In some cases, you may discover that you actually owe more on your home than it is worth. This is actually quite common now among many homeowners who took out exotic mortgage loans in the last few years when home values were rising rapidly and the market was red hot. Today; however, this can cause quite a bit of dismay among homeowners who are facing large mortgage payments on homes that have dropped drastically in value.

While it is anticipated that the market will begin to stabilize sometime next year, you will need to give careful consideration to whether you will have the ability to keep up mortgage payments within it's current loan document. If you decide that your payments are rising to fast and you are already having trouble, now is the time to take action to prevent foreclosure. The Foreclosure Survival Handbook is a great guide on how, when and who to contact to avoid foreclosure on your home. Act now while you still have many options instead of waiting until you are facing foreclosure with very few options left.

Additionally, you need to consider how long you plan to remain in the home and balance out that time in comparison to the amount of closing costs you will need to pay when you refinance your home. While a number of mortgage companies advertise ‘no cost’ refinance loans you should be aware that such loans rarely, if ever, exist. The costs for refinancing your loan are typically financed in with the loan under this type of arrangement. This means that instead of paying the costs for the loan up front you will be paying interest on them throughout the duration of the loan. In addition, it is important to research any mortgage company you consider to ensure there have been no complaints filed against them before you refinance your mortgage.

If you are planning to continue residing in your current home, it would be wise to go over the current homeowner's policy to be sure all liabilities are covered in correct amounts. It is especially important that the policy reflects the value of your home in today's housing market if the home is located in an area which is susceptible to hurricane or storm damage. In this tightening economy the last thing you need is an unexpected expense of several thousand dollars in home repairs or property loss.