Necessary Steps

Have Problems Paying Your Mortgage? Call Your Lender To Help You Out

With so many American homes going into foreclosure, it should be of no surprise that lenders are willing to go the extra mile to help you keep your home. However, you must act right away. The sooner you act, the better chance you have of keeping your home from going into foreclosure.

 Problems – Start With Your Lender

If you notice you’re having issues or will be, you need to speak with your mortgage lender. Stop procrastinating and make this phone call. They won’t judge you or yell at you for getting into trouble; it happens. Mortgage lenders make their money by your monthly payments; if you don’t make it and they have to foreclose, they lose money. It’s in their best interest to find ways to help you salvage your credit and keep you in your home.

If you wait too long, you make it harder for the lender to get you help. If the lender hasn’t heard from you after three months of no payments, the company will have to start the foreclosure process. Make sure you take the necessary steps to keep your home from entering the foreclosure process; not just for your home but for your credit too.

Before You Call The Lender

The first thing you need to realize before you call the lender is to swallow that pride and resign yourself to realize you need help. Give the lender the reasons why you are unable to make the payments and be truthful about it. You want to make a good impression so you need to answer as truthfully as you can to the questions being asked.

Six Ways Your Lender Can Help You

There are six ways that your lender can help you but it’s based on each person’s unique situation. These six ways include:

• Bankruptcy
• Debt counseling
• Deed in lieu of foreclosure
• Grace period
• Payment forbearance
• Sell the home

 Bankruptcy should be used only as the last resort since it can negatively affect your credit (usually up to 10 years). Bear in mind that bankruptcies are much harder to come by due to recently passed laws.

Debt counseling is usually offered when all the debt you have has fallen behind, not just the mortgage. Spending and structured repayment plans are typically designed to help you get back on your feet.

Grace periods are given to homeowners so they can wrangle with the problems on their own. However, if you don’t stay in touch with your lender during this time, they will start the foreclosure process.

Deed in lieu of foreclosure means you voluntarily return the home to the lender. However, you’ll still need to pay back the difference on what you paid for the home and what it was sold for. There are not many lenders who accept this arrangement.

Payment forbearance is when you have a bit of equity in your home, which allows you to rework the loan in order for lower monthly payment for a specific amount of time. Any past due amount could be added into a new loan.

Sell the home is an option for people who just don’t want the home any longer or have problems so serious that it cannot be resolved. The idea with selling the home is to sell it while paying off the mortgage balance and any back debt owed, keeping the home from going into foreclosure.

Four Questions Lenders Tend To Ask

 Question 1 – Why did you fall behind?

All too often good people get into bad troubles. Make sure you’re honest about why you fell behind such as losing your job, an unexpected medical expense, higher homeowners’ insurance and taxes, etc. Don’t embellish.
 
Question 2 – What is your current income?

Make sure you include all income that comes into your home; don’t forget to add in your savings and benefits.
 
Question 3 – What are your other debt obligations/expenses?

Make sure to list only the essential financial obligations such as student loans, child support, utilities, credit payments, etc.

Question 4 – What are you doing to fix the issue?

Make sure you brainstorm some ideas to help you fix your problems for the short-term and long-term. Be truthful if you think the situation is hopeless. Since foreclosure can ruin your credit for at least 10 years, it doesn’t hurt to explore all the possibilities.