If your mortgage due date arrives and you're not able to make your mortgage payment don't panic, or conversely, disregard the whole event entirely. Often individuals are incapable of making their mortgage payment because of a job loss or another cause beyond their control. It is at this time, one must pick up the phone and call their lender because they can, in all probability, help protect your credit rating, keep you in your home and give you peace of mind. You can renegotiate your mortgage terms with many lenders when hardship strikes.
When you call your lender, they will want to know if your income loss is temporary or more serious. If you have lost your job, and future payments are in jeopardy, advise them immediately of the exact nature of your financial distress. There are certain steps that you can take quickly that will reduce or prevent the possibility of foreclosure on your cherished home. How much help a lender can provide depends on the nature of the loan you have.
If you have a conventional loan, it is possible for some lenders to look at your financial position and work out some resolution that is advantageous both to you and the lender. If you have a loan that is backed or underwritten by the US government, lenders may be precluded from offering any advice until your loan falls to ninety days in arrears. Regardless, you have to communicate with your lender given the severe consequences that may result otherwise.
Your lender may be able to help you in one of seven ways: 1) By providing you with interest rate or principal reduction on your current loan, 2) By providing you with a re-amortization or loan refinancing on your current loan, 3) By granting you a special interest-free or low interest personalized loan based on the amount of money due on your missed payment, 4) By moving your current payment to the end of your loan, giving you time to get your finances straightened out, 5) By willing to accept a partial mortgage payment instead of the normal full payment, 6) By giving you an extended time period to get caught up on your mortgage payment. The time period may be as long as 1 to 2 years. This is achieved by appending a fraction of your unpaid loan payment remainder to your payment on a monthly basis until you are finally up to date with the payments, 7) By dispensing with the harsh late payment penalties that are often imposed as late fees.
Lenders actually have no vested interest in foreclosing on your home; they only have a vested interest in keeping you in your home making monthly mortgage payments on time. Lenders are aware of the many fiscal difficulties borrowers have in making their mortgage payments when hardships arise. Your lender likely won't volunteer their help, specifically if they don't recognize you're having problems making your payments. That is why, as a responsible homeowner, you must take the initiative and contact your lender and give them a heads up on your current financial hardship.
Many lenders do not offer borrowers all 7 of these possible renegotiation alternatives, however, it is likely that your lender has access to several of these methods. Generally, you do need to qualify for this type of help from your lender. Often it consists in the form of a detailed financial statement and substantiation of income loss. It is sometimes hard for certain individual's ego to have to admit to financial difficulty, but if doing so helps maintain you in your home, it certainly is worth the admission. I would think that you would rather make a phone call to your lender if it keeps you from the chance of losing your precious home and part of the American Dream.
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