Tips on How to Manage Mortgage Payments when in Financial Trouble
As a homeowner burdened with a mortgage, sudden financial reversals may occur along the way. The loss of a job or a sudden illness or emergency may occur leaving one financially drained to cope with the monthly payments. The following are but some of the options available to a distressed homeowner with a mortgage to pay, as reported by RealtyTimes.
1. Seek Reprieve. This is done by discussing your situation with your lender. An agreement as to temporary stoppage of payments to provide the homeowner leeway to raise funds. This though is a temporary solution and being current in payments is the end goal.
2. Refinance Loan. Also called a repayment plan, this entails changing terms in the mortgage agreement, often at an accelerated pace to make the outstanding payables current. There needs to be a written agreement to make this valid and enforceable.
3. Special forbearance relief. In this arrangement, the payments are either stopped or reduced for at most eighteen months from the last payment made. After this forbearance relief period, the payment requirements resume.
If the homeowner still is in default despite the remedial measures abovementioned, then there is a process that would go into motion. This includes demand letters, penalty fees as well as other options available to the lender. According to a report from Homeguides.SFgate.com, one of the gravest effects would be on your credit score. For extreme cases, bankruptcy would result as well as foreclosure on the mortgaged property.