Getting Around Mortgage Repayment Problems

photo credit: mhofstrand
If you’re getting into trouble with your home mortgage repayments, you might be interested to know what kind of compromises lenders are prepared to make to find a way to keep your loan viable and avoid selling your house. Apparently, foreclosing on a loan can cost the lending authority around $50,000, so there’s often a real incentive for them to find a way to get the borrower paying back the loan on a regular basis. Plus, with house prices falling in some areas, the lender will be trying even harder to work out a loan rather than foreclose, because they may not fully recoup their money if they sell the property.
The procedure for working out a compromise with a mortgage lender will often involve steps like these:
- The borrower has to provide detailed information about their income and expenses, along with statements and bills to back up the details.
- A new budget might be suggested, often eliminating items like cable TV or cell phones, or insisting a car with high repayments is sold.
- The borrowers allow around $200 over the new budget for emergencies, and then calculate whether or not it’s possible for the mortgage repayments to be made.
- New versions of the loan might include an extended term (for example, 40 years instead of 30 years), a fixed interest rate for a longer period, or sometimes even a reduction in the principal.
Tags: Budgeting | Finances | Lending | Mortgages | Saving Money










This entry was posted on Tuesday, July 8th, 2008 at 3:30 am and is filed under Mortgages. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

