Difficulty Paying My Mortgage
Foreclosure is a real possibility when you have difficulty paying your mortgage loan. One missed payment can turn into several, and before you know it, your lender threatens foreclosure. There are ways to increase mortgage affordability. Talk with your lender to see if you're eligible for the following options.
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Making Home Affordable Refinance
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A refinance can provide a solution to mortgage difficulty because you're able to qualify for a lower mortgage rate to reduce payments. Regrettably, being behind on your payment, being unemployed or having little equity in your property can disqualify you for a refinance. Through the Making Home Affordable refinance, borrowers who are unable to qualify for a traditional refinance due to credit or income issues may qualify for this government-backed refinance program. Talk with your mortgage lender to discuss eligibility.
Loan Modification
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The Department of Housing and Urban Development assures property owners that their mortgage lenders do not want their houses. Thus, lenders do not want to foreclose or take back properties if there are other options. Lenders will go to great lengths to help you keep your home and avoid foreclosure. Along with the option of refinancing, some lenders may reduce interest rates and payments by means of a loan modification. A modification can quickly eliminate mortgage payment problems and reduce the risk of foreclosure.
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Take a Mortgage Break
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Perhaps you're ill, laid-off or scheduled to have surgery. Temporary setbacks can play a role in difficulties paying your home loan. Rather than shut out your mortgage lender and stop payments, communicate your situation and ask for a forbearance -- that is, skipping a few payments. After careful review of your situation, your lender may agree.
Eliminate the Monthly Payment
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Selling the home can eliminate payments and ease the financial burden of a high mortgage. Take action at the first indication of problems and contact a real estate agent to place your property on the market. Discuss a fair asking price with your agent. Additionally, get in contact with your lender to see if it will grant a short sale. Short sales in real estate are transactions negotiated with your mortgage company that allow you to sell the home for less than what you owe on the mortgage loan. Short sales help prompt a quick sale, which allows you to avoid a home foreclosure. Know the risk of a short sale. Lenders may report the debt settlement to the credit bureaus, which can reduce your score; or they may seek a deficiency judgment after the sale of the property. Use an attorney to negotiate a short sale deal.
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