The word “foreclosure” is a word that a homeowner does not want to hear because they may lose their home. This is especially true if you don’t make your monthly payments on time. When a homeowner purchases a home, they intend to make their monthly payments on time, but unforeseen events can occur that affect their 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, you will need to take immediate steps 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 provide you with a few options which may include:
• Forbearance – This is a temporary agreement to delay your mortgage payment for a short period of time. You will have to convince the lender and show him that you will soon have some money and will be able to make a payment when it is due without fail.
• Loan modification: the mortgage company could 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 repayment plan is the time it will take to pay off a mortgage in full.
• Payment plan – This is where the late monthly payments are divided and then added to the remaining monthly payments. For example, if you pay a thousand dollars a month and have been in arrears for three months, it would be three thousand dollars. This money would be distributed equally among the remaining monthly payments. If you have fifteen months left on your mortgage, your monthly payment would be twelve hundred dollars.
• Refinancing – late payments would be added to the loan balance. The repayment period would also be extended. At some point, you can get a lower interest rate.
• Partial claim on some government loans Some borrowers are provided with another loan so that 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 buying a home, you should have a written budget so you know how much you can afford each month for your mortgage payment and not go over your budget. This is the first step in ensuring that you do not default on your mortgage and face foreclosure.