Catching Up

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Don’t panic when you are behind your mortgage payment. Image courtesy of Trafalgar Properties

Most of us run on credits and that’s why we have our credit scores. Well, living with credits is good as long as you are responsible and wise enough to find ways to pay them on time. Getting a house through mortgage is something the same with purchasing using a credit card, only to a higher and longer terms. While most are done in good faith, one cannot really predict the future and in fateful cases, run into difficulties causing to miss payments on the mortgage.

About 1 out of every 20 American homeowners is behind on mortgage payments, according to recent data from CoreLogic, a financial services firm.

Dana Dratch for Bankrate wrote an article on ways to catch up on your mortgage arrears.

Repayment: Installments or lump sum

With a repayment plan, you make your regular payment amount, plus extra, for as long as it takes to make up for the late payments. This is an option for homeowners who have remedied their financial problems and can handle an even larger monthly obligation.

Loan modification or refinance

A loan modification is almost like a refinance. You start a new loan with a longer payoff term or a lower interest rate. Loan servicers will want to know your financial problem is behind you.  Typically, you have to meet some criteria, such as proving a financial or personal hardship.

Same mortgage, lower payments

If you’ve fallen behind because your mortgage payments are too high, there could be solutions that don’t involve your mortgage servicer.  Shop for a better price on your property insurance to reduce your monthly payment. Find out whether you’re eligible for property tax abatements in your area especially for seniors, this can lower your monthly mortgage payout.

Principal reduction

If you’re underwater in your loan, principal reduction could be an option. The servicer reduces the principal on your loan, based on its underwriting and the actual value of your house. This is a better tool for someone who is upside-down in their mortgage than it is for a homeowner who can no longer afford the payments. Read full article here.

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Don’t over fill your mind with worries. Image courtesy of Pinterest

Overthinking kills. Don’t panic if you are in this type of situation— you have several options. And you’re not alone!

While there are things you can do, there are also things that you must not do. Lawfirm Stephen R. Golden listed 10 things one must not do when behind on mortgage payment. And here’s a few:

  • DON’T bury your head in the sand. Although it can be tempting to just do nothing and let the cards fall where they may, DON’T! You HAVE options and need to do something to change the situation. In a recent poll taken of people who did nothing and ended up having their property foreclosed on about 94% said they wished they could do it over again. They would look into other options, discuss the possibility of a short sale, or at least try for a loan modification.
  • DON’T call and yell at your lender. Will you feel better? Probably, but what about the poor customer service rep whom you just yelled at that doesn’t care if the bank gets any money or not? The decision makers that you need to talk to about your situation probably will never take your call leaving you ranting and raving to someone who can’t change anything and now probably wouldn’t if they could.
  • DON’T strip items from your house. This is a crime and you can be prosecuted for it. I know it can be tempting to tear up that carpet and raid the cabinet hardware and sell it all on eBay but it’s a crime and it’s not worth it. Many of these people are being caught and prosecuted fully by the lenders.
  • DON’T get discouraged. Saving a home, saving your credit, or investing in your future are not quick fixes and can take time. Don’t get too discouraged through the process and keep your head high and a positive attitude. It will not only make you feel better but sooner than you know it you’ll hear those magic words “WE HAVE AN APPROVAL!”
  • DON’T give up. When you have missed a mortgage payment or know you will be missing one or more in the future it can seem like you are in scary, unfamiliar territory. You may ask yourself, “How did I get into this? How did I let this happen?” Please know that you are not alone and there IS hope. You have options and there is a light at the end of the tunnel. The only person who can make the decision to fix this problem is you and YOU CAN DO IT. Now go out there and take your first step toward FREEDOM from your mortgage problems. Read full article and details here.
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Dealing with arrears notices is an uphill climb. Let us help you! Image courtesy of Aulda NPO

Unfortunate things do happen and being behind on mortgage is one of them. Life is round and you just got to keep it turning. As they say, it could be a bad time but never a bad life. Just like what the articles imply, there are always ways, proven and effective ways. Having to deal with arrears or foreclosure notices and the like? We have more information about foreclosure here: Talk to us and we’d glad to help you!

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