The Options Available When Faced With A Mortgage You Cannot Afford

The Options Available When Faced With A Mortgage You Cannot Afford

No-one knows when they will be hit by financial hardship and not be able to afford their mortgage payments.  If you find yourself unable to pay your mortgage, you need to know what your options are.  There are a number of options that you will have available before you will be faced with foreclosure.

Find Out About Refinancing Your Mortgage

Mortgage rates will change which means that refinancing your mortgage could lower your payments and save you some money.  Refinancing your mortgage is actually a very straightforward process, but it needs to be done before you miss any payments.  To better understand how this helps, you need to understand what refinancing your mortgage is.

When you refinance your mortgage, you will effectively be taking out a new mortgage at a lower rate.  The money from this loan will then be used to pay off your current mortgage. When you go through this process, you will need to go through the same steps as applying for your current loan.  After submitting your applications, the mortgage lender will evaluate your credit, debt, and income before approving your loan.

Modify Your Mortgage

Loan modification is another option that you need to consider.  When you think that you are not going to be able to make your mortgage payments, you need to contact your lender.  You may be able to work something out with the lender so that you can keep your home and still make some payments.  

When you contact your mortgage lender, you need to be prepared to talk about why you will not be able to pay your mortgage.  You also need to be able to tell them if this situation is temporary. If you cannot modify your mortgage with your lender, you should consider contacting the Consumer Financial Protection Bureau to talk about your options.

Getting A Reverse Mortgage

Reverse mortgages are only available to people over the age of 62 and could help you when you cannot make payments on your mortgage.  When you use this option, you are going to be drawing a lump sum or receive monthly payments against the equity of the home. The benefit of this option is that you will not have to repay the money as long as you are living in the house and the money will generally be tax-free.  

However, it is important to note that there are some drawbacks to a reverse mortgage. Closing costs will still need to be paid when the loan is settled and over time the interest may total more than the value of the home.  This means that you might not leave any equity in your home for your family.

There are many options that you can use when you are not able to make mortgage repayments.  Contacting your mortgage lender before you miss any payments is the best option and you will generally be able to negotiate a change to your mortgage or make use of other options that your lender has to offer.

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The Options Available When Faced With A Mortgage You Cannot Afford
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The Options Available When Faced With A Mortgage You Cannot Afford
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No-one knows when they will be hit by financial hardship and not be able to afford their mortgage payments.  If you find yourself unable to pay your mortgage, you need to know what your options are.  There are a number of options that you will have available before you will be faced with foreclosure.
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Abstract Home Solutions
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