Buying a house is a big investment. It
really puts a dent on your financial resources. Of course, the expenses do not
end with the down payment. You still have to contend with the monthly payments
for the mortgage. This is a financial situation that you will have to live with
for years until you have fully paid off your loan.
But what happens if you get behind in
your mortgage payments? A delay in payment can have very serious consequences
for your mortgage situation. If the delinquency in payments has become too
severe then your home could be in danger of foreclosure. A foreclosure means
that your property will be repossessed by the lending institution that gave you
your mortgage.
Fortunately, even if you have
defaulted on your payments, it does not necessarily mean that your property
will be foreclosed. There are various alternatives to a foreclosure that you
can take.
Some of these are:
Paying the delinquency: Generally, all
lending institutions are required to accept all the payments that were
delinquent and reinstate the loan. The delinquent payments that you have to pay
may also include some legal fees especially if you are already in the
foreclosure stage. There are also lending institutions that require certified
funds in order to reinstate the loan.
Forbearance and Repayment: One of the
most common ways of resolving a delinquent mortgage is to work out a plan with
your lending institution where in you get to pay a part of your delinquency
every month on top of your regular monthly payments. If you are in a situation
where you are not able to meet the monthly mortgage payments, your lender can
elect to extend the forbearance by suspending payments for a certain period of
time up until you can start a repayment schedule.
Payment Assistance: Some state and
local governments and also private charitable organizations have instituted
programs that help people with delinquencies pay all or part of their mortgage
obligation for a certain period of time.
Re-amortization: In a re-amortization,
the delinquent mortgage amount is added to the loan balance as a way of
bringing the mortgage payments up to date. This move increases not only the
total loan amount but also the monthly payments. Of course, the increase in
payment will not be as large if the life of the loan is also extended.
Private sale: A private sale of the
property affected by the delinquency can also be done as it will allow you to
meet your obligations as well as get any equity that may have accumulated. In
private sales it is usual that the amount is greater than the stated amount
owed on the loan.
Most of these alternatives presume
that you will be able to pay your mortgage payments at some point. But there is
also a particular foreclosure alternative called a loss mitigation program. The
national government as well as the mortgage industry established this type of
program as a way of stopping foreclosures. Under this program you are given
options that will not only assist you in keeping your home even if you do not
have the financial capability to pay for the mortgage payments. With these
types of programs, it becomes so much easier to address the problem of
foreclosures.
Visit www.kenyan-real-estate.com
for more.
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