The importance of paying your mortgage on time can never be overstated. Failing to pay your mortgage for more than 30 days will force the moneylender to start the foreclosure procedures. If your moneylender is a reasonable person, you can likely work out a deal with him. There are several programs offered by the government and private moneylenders to help homeowners on paying their mortgage payments. However, you need to meet certain criteria in order to be eligible for such programs. If all else fails, then here is a list of alternatives that you can opt for instead of foreclosing your mortgage.
Partial Claim
If you have opted for insurance for your mortgage, then the mortgage insurance company will help you by lending an amount. The insurance company will compensate for the total missed payment and bring your payments to current. The representatives of the insurance company will work with the mortgage payees to understand their financial situation and help them out on their outstanding mortgage payments.
Loan Modification
If you are unable to afford the monthly payments, you can talk with your moneylender and restructure your mortgage loan. However, not every moneylender will entertain this. You can change different components of the loan such as monthly payments (mortgage closing cost calculator Florida), interest rates, and repayment schedules. The lenders can also transfer the default mortgage payments to the outstanding loan amount.
Sell Your House
When you do not have sufficient financial resources to make your monthly mortgage payments, you can talk to the moneylender and work out an agreement. You might be granted an extension of 120 days before beginning the foreclosure procedures. This will give you enough time to sell your house. As part of the agreement, you will have to pay the loan amount from the money you got by selling the house.
Short Sale
In this, the moneylender takes up the responsibility of selling your house. If there is a decrease in the property after the mortgage loan approval, the moneylender will agree to sell it for a lesser price than the outstanding loan amount. The mortgage payee is not liable to pay any extra amount. This program is run by the federal government and the mortgage payee should meet certain criteria in order to qualify for the program.
Deed In Lieu
This transfers the ownership of the property from the mortgage payee to the moneylender. The main advantage of this is that it does not affect your credit score. In some cases, you will also be eligible for relocation assistance.