by: Katie-Anne Gustafson
If you have an FHA loan, your mortgage insurance may be an option for bringing payments current. Contact your lender to learn if you are eligible for a payment from this fund. You will need to learn about the prevailing requirements in your state. It is also very important that you are able to resume regular, timely payments once your mortgage payment has been brought current. It can be very worrisome when you?re a mortgage payment behind. If you don?t have an FHA loan you still have options available to help you navigate this financial crisis.
Speak to the Mortgage Provider
Make a meeting to speak to someone in control of your mortgage account. Don?t discuss it over the telephone. They are more likely to be sympathetic to your situation if you are dealing with them face to face. Explain the circumstances of how you became one payment behind with your mortgage. Go prepared, taking with you written details of your income and regular outgoing payments. Tell them how much extra you can afford to pay and ask if it is possible to add an extra amount to your current mortgage payment until the arrears is caught up. Your mortgage provider shouldn?t really want to be taking the roof from over your head for one missed payment, and so ought to be willing to come to some agreement with you as a one off arrangement.
Credit Card
Is it possible ? and necessary ? to make this payment via a credit card? Think carefully about doing this. It may get you out of immediate danger with your mortgage provider, but at what cost long-term with the added interest rates? The last thing you want to do is create a bigger financial mess. If you have little credit, and the repayment would not make you much worse off whilst you pay back the amount, then this is something you might like to consider in order to protect your home.
Refinance Your Home
This may seem a little drastic for only being one payment behind with your mortgage, but if you have equity in your property, refinancing your home may help your household finances by offering you the opportunity to consolidate your debts as well as making the arrears disappear. This is one way to use your collateral to help you get out of debt, but it?s one you need to explore carefully before signing any papers.
For example, by refinancing your home, are you taking any risks with respect to ownership of your property? Are there any extra clauses on the proposed new contract that don?t exist on the original one? What are the implications as regards to interest rates? It could be that this actually works in your favor, and your new mortgage will be subject to a lower interest rate than your existing one. www.super-mortgages.com/Get-Out-of-Debt is an informational source to look at should you require more tips on refinancing.
You also need to know what additional charges you will incur by refinancing your home. For example, what legal fees will be required, and are you liable for them? What about the valuation fee for getting someone out to value your property? This is an important thing to consider because you may find that your property doesn?t have enough equity to make refinancing it worthwhile in the current economy, but you will still need to pay the valuation fee, which will weaken your current cash flow further.
When refinancing your home make sure you shop around and find out what deals the different mortgage providers are offering. There are many who will offer good deals to first time buyers, but they offset this by having higher rates for refinancers. On the other hand, there are mortgage providers who will advertise themselves as the people who can show you how to get out of debt by refinancing your home, and will give special deals that reduce interest rates on the first year or so you are repaying the new mortgage. Yet other providers may offer you a free package to transfer your mortgage to their company ? this could include the valuation and any legal fees ? you will need to explore exactly what this includes and whether there is any cost hidden that?s not included in their package. Then you?d need to see if that package is worth more than the money you?d save by using a mortgage provider who gives you a lower rate on your mortgage interest for a limited period ? and the ones offering reduced mortgage interest, you need to find out what will happen when the rates are raised at the end of the ?honeymoon? period, are they raised to a higher than normal rate to compensate for the financial break you had at the outset? Always keep in mind why it is you?re actually refinancing your home, debt elimination and consolidation, and even though you will end up with a better financial picture now, you need to make sure that this remains so until the mortgage is repaid.
Another thing you need to enquire about when first approaching any mortgage provider about refinancing is whether or not they will accept your current credit standing. If you have any outstanding debt with your current mortgage provider, this may go against you as the companies you are now approaching will more than likely request a reference from them. If you have been always on time with your payments prior to this current situation arising, then it?s possible that they might bend their rules because of the circumstances under which the arrears occurred. However, if you have had problems in the past, it will go against you and might result in them turning down your request to refinance with their company. Any other debt problems you have currently, or in the past, could also score against you so make sure you are completely honest at the initial meeting as this could save a lot of time in the long run.
Other Options
With only one mortgage payment in arrears you should be able to manage to get financially stable on one of the above options. However, if your situation requires more additional finances, and you need to free up more capital, it could be that you need to consider selling your home and either buying one that won?t have such a high mortgage, or renting one. For a person who currently owns their home, renting never seems an attractive prospect, but there are places where you can rent to own the property. This may be an alternative to renting which you could consider.
Finally
The most important thing to do is to sort this out immediately you realize there?s a problem. Your home is something you need to protect, and any arrears on the mortgage can have devastating consequences unless you are proactive in resolving it. Take stock of your financial situation, consider your options, and then take the one that will help you get back on your feet again.
About The Author
Katie-Anne Gustafson is a contributor to www.super-mortgages.com and a WAHM obsessed with her two preschool boys and illustrator husband Mikael.
Note to webmasters: Above hyperlinks must be kept intact when this article is published in another website.
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What are VA loans?
What are VA loans?
by: Mark Lambie
VA loans are basically mortgages or home loans geared towards ex-military servicemen and women.
The VA loan programme was created in 1944, and was initially known as the Servicemen's Readjustment Act, to help returning servicemen settle down and purchase their first home.
There are, on average, over twenty-five million American who complete their military obligations each year.
You are eligible for a VA loan if you are veteran who has been honourably discharged.
The eligibility requirements vary, depending upon whether you served full-time or in the reserves, so check with your lender.
A VA loan will generally guarantee around 25% of
the total home loan, up to $89,912.00.
VA loans are often made by a variety of lenders, such as banks and savings and loans institutions.
These loans act more as protection for the lender against loss at...
Mortgages > What are VA loans?
4 Things You Shouldn't Do When You're Buying A Home
4 Things You Shouldn't Do When You're Buying A Home
by: Suvadip Das
1. Don't Make a Major Purchase
You've just found out your credit is A . That's great news, because a new car would look fantastic in the driveway of your new home. But hang on--if you are depending on a mortgage to move in, you'd best wait until after closing to buy the car.
An increase in your debt to income ratio reduces the amount of monthly income available for your mortgage payment. If you tack on a higher car payment, the bank might decide you cannot afford the home.
Using cash to purchase the car could also create a problem, since banks consider cash reserves when approving your mortgage. If you make a major purchase before closing, talk to your loan officer before you do it.
2. Don't Change Jobs Unless It's Necessary
Lenders like to see a consistent job history. They aren't usually as nervous if you change jobs within the same field, but it's better...
4 Things You Shouldn't Do When You're Buying A Home
Mortgages > 4 Things You Shouldn't Do When You're Buying A Home
Should you Get an Interest-only Home Mortgage?
Should you Get an Interest-only Home Mortgage?
by: Mark Lambie
Before you consider taking out an interest-only mortgage, you should first understand what they are. Unlike traditional, fixed-rate mortgages, interest-only mortgages allows the borrower to initially pay the interest on the principal for a short period of time, rather than making payments on both the principal and the interest. This is how it works: say, for example, you've taken out a mortgage for $100,00.00, which would require a monthly payment of around $1,000.00. However, with an interest-only mortgage, the same payment would only amount to around $695.00. You could use the extra money to pay existing debts, like credit cards or student loans, or perhaps invest it.
The concept of an interest-only home loan is not a new one. A descendant of the jumbo market, these types of mortgages were initially geared towards those who intended to utilise the excess cash for other types of...
Should you Get an Interest-only Home Mortgage?
Mortgages > Should you Get an Interest-only Home Mortgage?
Mortgages: What You Need To Know
Mortgages: What You Need To Know
by: Marvin Jones
A mortgage is legal agreement or contract that says that a party has agreed to put up a property, a house or a piece of real estate, as security to get a loan. By doing this, the person getting a loan can buy a piece of property that he initially cannot afford. Still, if by any chance, he cannot pay for the loan, the bank will have to foreclose the property and resell it to others.
The lender will hold the title of the property until after the full amount of the loan is paid for plus interest. Depending on the terms of the loan, repayment can last until a couple of years. Two of the most common mortgages in the country are the fixed-rate mortgage and the adjustable-rate mortgage.
As shown by the name, fixed-rate mortgage has an interest rate that stays the same all throughout the life of the loan. If for example the loan is termed for 10 years, then the interest rate will stay...
Mortgages: What You Need To Know
Mortgages > Mortgages: What You Need To Know