Talk To Your Mortgage Lender When In Arrears
Mortgage arrears can be the worst nightmare of any homeseller as they may lead to you losing your home
. However this is not to say that all is lost if you fall behind with your mortgage repayments. In some cases property buyers are able to avoid repossession, but this may depend on your actions and your dealings with your lender.
Typically lenders are reluctant to take property away from the homeseller. Despite what you may believe the majority would rather come to an agreement with property buyers, allowing them to stay in their homes. Repossession is usually only a final resort and of course depends on how far you are behind with your mortgage repayments, and the circumstances. Generally major lenders do not commence mortgage repossession unless you are at least three months in mortgage arrears; some may even give the homeseller six months grace before taking proceedings. If you know you cannot meet your mortgage repayment, the first step is to speak with your mortgage lender as soon as you realize you cannot meet your mortgage repayment.
The sooner you contact them the better your chances are of being able to reach an agreement, so let your lender know whats happening. Never be tempted to hide your head in the sand and hope that your financial problems will go away, they never do. Your lender may talk with you about actions you are able to take to remedy your situation.
If financial problems are short term you may be able to take a holiday from your mortgage repayments. This may allow you some time to get back on track, however usually this affects your credit rating.
Consider extending the term of the mortgage which allows you to spread the cost, which typically reduces the monthly mortgage repayment. However you will pay out more in interest on the loan by doing so, but once you catch up and you are in a better financial position you may be able to reduce the mortgages term.
You could consider asking the lender if you can switch to an interest only mortgage for a short while and this may bring your mortgage repayments down by a great deal each month. The downside is that you are only repaying the interest on the total amount you borrow, and have to find the capital when you reach the term of the interest only mortgage.
If you cannot reach an agreement with your lender then you may wish to consider other options such as a quick sale of your home. There are property purchasing companies out there who specialize in helping property buyers get a cash home sale. When considering this as a last resort you are able to sell your house for cash and pay off your mortgage. You can even sell to rent back which means you do not have to move, you can stay in the property as a tenant and pay affordable rent.
by: Ruban Selvanayagam
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