The word “foreclosure” is a word a homeowner doesn’t want to hear because they may lose their home. This is especially true if he does not meet the timely monthly payments. When a homeowner buys a home, he intends to make his monthly payments on time, but unforeseen events can happen and affect his financial situation. You could lose your job, have a health problem that makes you miss several days or weeks of work, get divorced, etc. If you find yourself in a situation that could affect your monthly mortgage payment on time, you will need to take immediate action to avoid possible foreclosure on your home.
If there is no way you can make a monthly payment, contact the mortgage. They may be able to give you some options which may include:
• Forbearance: This is a temporary agreement to delay a mortgage payment for a short period of time. You will have to convince the lender and show him that he will have some money soon and will be able to make a payment when it is due without failing.
• Loan Modification – The mortgage company may lower the interest rate, which will lower the monthly payment. Aside from the loan modification, the mortgage company may also agree to extend the repayment period. The amortization schedule is the period of time it will take to pay off a mortgage in full.
• Payment plan – This is where the monthly payments in arrears are divided and then added to the remaining monthly payments. For example, if you pay a thousand dollars a month and you have been in arrears for three months, it would be three thousand dollars. This money would be distributed evenly among the remaining monthly payments. If you have fifteen months left on your mortgage, your monthly payment would be $1,200.
• Refinance – The missed payments would be added to the loan balance. The payback period would also be extended. At some point you may get a lower interest rate.
• Partial Claim: On some government loans, some borrowers are given another loan so they can repay the delinquent payment.
• FHA Secure – This is intended to help people avoid foreclosure when they are in default. There are different conditions and terms to determine if a person is eligible for this option. This is a program implemented by the Federal Housing Administration.
Before you buy a home, you should have a written budget so you know how much you can afford each month for a mortgage payment and don’t overextend your budget. This is the first step in making sure you don’t default on your mortgage and face foreclosure.
