What to Do When Mortgage Payments Send You Reeling
Let's face it - there is a tendency in which homeowners lose their homes because they cannot make their mortgage payments. This is certainly a terrifying fact which is linked with one's financial problems. However, knowing how to save your home and be rational when it comes to the mortgage is an important lesson everyone should learn.
So, how to be smart when it comes to keeping your home and the mortgage payments solid?
1. Knowing The Type of Your Mortgage
First and foremost, you should know what kind of mortgage you have. The most common examples include:
o Hybrid Adjustable Rate Mortgages - Mortgages with fixed payments for a few years
o ARMS - Mortgages with adjustable rates from the start
o Fixed Rate Mortgages - Mortgages where the rate is fixed for the life of the loan
In case you have an ARM (standard or hybrid) and you are experiencing an increase in the payments, you should always look for a refinance to a fixed-rate loan possibility. However, if you are planning to sell soon after the adjustment, refinancing is an option. On the contrary, staying in your home for a while requires a fixed-rate mortgage as the ideal scenario.
2. Knowing When You Are Behind On Your Payments
If you have troubles with making your payments on-time, you should always contact your loan servicer and immediately know your options. A loan modification may be possible, usually if your home is your primary residence, you owe less than $700k on your first mortgage and some gross income versus payment aspects.
Contacting your loan servicer for this guarantees the best solution.
3. Knowing When to Avoid Default and Foreclosure
There are many plans linked with defaults and foreclosures. Reinstatement, Repayment plan and Forbearance are the typical foreclosure prevention options. However, you may qualify for a forbearance or a loan modification. In the end, selling your home or going in with personal bankruptcy are the last calls to action.
At last, there may be more alternatives linked with your mortgage payments and home. If you want professional counseling, contact our teams at 123 Credit Consultants. We'll be happy to assist you!