Resolving Mortgage Problems: Talk with Your Lender FirstBy Karen Lawson
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When you bought your home, you may have taken out an adjustable rate mortgage (ARM) with a very low interest rate. Now your payments are going up, and property values may have decreased.
Mortgage Lenders May Offer "Workout" OptionsIf you anticipate having problems making mortgage payments, it's important to contact your lender immediately. Waiting until you've missed payments can limit options for assistance. Examples of loan workouts may include modifying your loan to reduce or stabilize mortgage interest rates. If you have missed payments, your lender may add the amount of missed payments to your loan balance, and reset the due date of your payments. The key to making successful arrangements with your mortgage lender is communication. Your lender likely has to meet guidelines established by third parties such as investors and mortgage insurance companies. Quickly submitting all information requested by your lender will help your chances of finding a solution to rising mortgage rates.
The Check in the Mail Is a Reality CheckMany homeowners get into financial trouble due to overspending or not keeping track of how much they spend each month. Establishing a monthly budget that includes easily accessible savings can help prevent a financial crisis when emergencies occur. A credit counselor or financial consultant can help you establish and maintain a cash budget for household needs and routine expenses.
About the Author
Karen Lawson is a freelance writer with more than fifteen years of experience in mortgage banking. She holds BA and MA degrees in English from the University of Nevada, Reno.
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