Lenders Can Help To Keep Your Home
Due to recent virus crisis many have been asked to stay home with no paycheck. If you do not have substantial savings, you are likely to fall behind in your mortgage payments. If you have more than 20 per cent equity, losing your house should not be the choice you have to make.
There are options you may have. But you will need to take actions on your own. It is to be noted that do not reach out to your realtor (unless you really must sell home). Most realtors do not have the necessary knowledge about lenders, especially in the areas of refinance.
Call your lender. Sounds simple, but people are reluctant. Most lenders are reasonable and can work with you. Sometimes you may have to be persistent. Basically, you will have to explain your situation. It is possible that lender may allow you up to 6 months mortgage payments that can be added to the end of the loan term. It may be good idea that you call your lender as soon as possible so that your late payments are not reported to the credit bureaus. Your lender will give you the options for your loan. Also note, depending on where your property is located, the state may have laws in place to protect your home. No need to panic; but you will need to reach out.
Refinance- Refinancing your loan may be a good solution. You will consolidate all your debts including the mortgage balance and get a fixed rate mortgage secured by your home. Yes, the loan may be at higher rate but still at lower payments prior payments including home and credit cards. Your new payment may be tax-deductible. (check with your accountant). You may also be able to get home equity line.
In reference to your credit cards, you need to stop using your credit cards. There are debt relief companies can work with your credit card companies to reduce what you owe. Be sure to check out the debt relief companies. With their help you will save your credit rating and reduce your payment substantially. I recommend that once the debt has been reduced, you may want to refinance then.
Cut Back Expenses. There are so many ways. Just recently we shopped for car insurance. By shopping around, I was shocked to learn we saved over $120 per month. You can also shop around for your internet and cable. You can cut down your grocery bill by shopping at discounted grocery store than the neighborhood. (example, 1-gallon milk costs $4.59 at local grocery chain store whereas similar milk at Costco may be $ 2.29).
Every little bit helps. Saving an extra $300-400 a month could be enough for many people to keep their homes in tough times.
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