The reading level for this article is Moderate
The problem is probably going to get worse before it gets better. Many of you facethis situation doing nothing, allowing the problem to overwhelm you. This is notright. When you know a running stream is coming you should minimize the damage bypreparing for it the best way you can. It’s always better to approach a lenderbefore you become delinquent.
Today, many borrowers find it very difficult to cope up with the situation if theyare having a problem in paying their loan. They loose all their hopes and think thatforeclosure is the only way out, but in reality having foreclosure is the worstsituation for a borrower.
If you are having problem paying your loan, there are various options availablewhich are as follows:
1. Deed-in-lieu of foreclosure: Since, foreclosure damages your credit; you maytransfer the ownership of your property to the lender toa. satisfy the obligation of repaying the balance due on the defaulted loan andb. avoid the credit problems associated with regular foreclosure.
2. Forbearance Plans: It is the lender’s postponement in foreclosure because youhave made satisfactory arrangements to pay the overdue mortgage amount in arrears.
3. Modification: If you are recovering from some financial problem and now have anincome level lower than it was before, your lender may agree to change the originalterms of your mortgage without requiring you to refinance. Changes may include areduction in the interest rate or change in the loan type or longer maturity date.Unpaid interest may be added to the loan balance.
4. Pre-Foreclosure Sale: It is a process where you are allowed to sell your property(if the appraised value of your property is at least 70 percent of the amount youowe) for an amount less than what is owed on it, to avoid foreclosure. This sale(price has to be atleast 95 percent of the appraised value) fully satisfies yourdebt. The sale may not produce enough proceeds to pay out the loan but the lenderwill save the costs of foreclosing and selling.
5. Repayment Plan: It is a verbal agreement between you and the lender, where youagree to make additional payments to pay down past due amounts, while still makingregularly scheduled payments.
6. Partial claim: You may be able to get an interest-free loan from HUD in order toget your mortgage current. This option has special qualification criteria.
7. Workout Assumption: If you have a qualified purchaser who will take title inexchange for assuming the mortgage, the lender may allow it.
If you have any other question related to mortgage, feel free to visit this sitehttp://www.mortgagefit.com
External resources:
1. Know more about foreclosure-> http://www.mortgagefit.com/foreclosure.html
2. Know more about refinance-> http://www.mortgagefit.com/refinance.html
3. Assumption-> http://www.mortgagefit.com/assumption.html
4. HUD-> http://www.mortgagefit.com/hud.html
5. Appraised value-> http://www.mortgagefit.com/appraised-value.html
