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| Missing mortgage payments: what to do? |
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In times of financial stress, it pays to have built up your own chest fund for your own emergencies. Still, what can one do if ever one mortgage payment is missed? The possilibility is aways there that your mortgage provider will start foreclosure decisions on you home. If you would like to keep your house, bear in mind these reminders below:
Keep making home payments - even if you've been remiss on one month's payment, keep paying your bank whenever you've got money. This show your willingness to see your payments through and might allow you to get some time to stretch your payments and keep on good terms with your lender.
Make your mortgage your priority - it's tempting to pay off your smallest obligations when a bunch of them come calling, but when your home's at stake, it's better to lose other items first. Review your lifestyle and cut down on unnecessary expenses, and use your savings to advance your home mortgage.
Call for help - some mortgage lenders might give you a breather based on your circumstances, while others might find it in their interest to let you default on more payments. Bringing the news to them gives you more options, though. You can claim a hardship variation on your loan, which is It just might give you the chance to refinance your mortgage while you're still on good terms with your lender.
Refinance your mortgage - this allows you to add your existing debts to your mortgage, so that you can focus on paying your other debts. The trade-off is that you'll be paying over a longer time, and overall, a larger amount of interest. This strategy can backfire in certain situations, so consult a financial expert regarding your refinancing options. Be aware of any exit and transfer fees that can be involved.
Get better lending rates - this is an option if you're not yet in default. Switching to a mortgage without extras like the ability to redraw advanced payments can result in a lower monthly interest rate from your bank.
Sell the house - before mulling over this option, calculate the equity you've built up so far in your home, and how much you may be losing if you had to start over. Also, the built-up equity (the paid-up value) in your home can be a barganing chip in negotations with your mortgagers.
You might want to review your financial status and decide if you can get better housing at a lower total cost elsewhere. Also consider renting out a part of your house or a room. Remember that selling a house or letting a room will garner taxes on capital gains and rental income, respectively.
Save your super - you wouldn't want to be left with no nest egg, so keep from dipping from your super funds for as long as you can. Remembr that if your house gets repossessed and you also declared bankruptcy, your super funds will be kept only if you didn't access them. Availing of the hardship clause for financial emergencies in your super fund is a tactic that predatory refinanciers can abuse. |
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