Getting Around Mortgage Repayment Problems
If you're new here, you may want to subscribe to my RSS feed. Want more frequent updates follow me on Twitter. Thanks for visiting!
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.
