Managing your personal finances the smart and right way can be a daunting challenge.
If you have just recently been approved for a home mortgage loan or considering obtaining a home mortgage loan, then you might as well know by now that it is a number one priority to never default or fall behind on your payments.
The prime commandment when it comes to paying for a home mortgage loan; avoid bank foreclosure.
Bank foreclosure happens when you are unable to pay for your mortgage dues for a long period of time, often as little as 60 or 90 days, in such a way that your lender believes you may be at risk of not completing your payments.
What are the repercussions of foreclosure? First of all, when this happens to you, you risk losing the property on which the mortgage loan is secured, in which case you could be risking the loss your primary residence! Any other properties that you have used as collateral could also be at risk.
Plus, foreclosure has very serious effects on your credit score. If you damage your credit rating, you are very unlikely to be able to get a loan as easily as before.
If you want to prevent this from happening, here are some useful hints in order for you to stop foreclosure and save your home:
- In the first place, once you get a home mortgage loan, before closing in on the deal, check very carefully if you will be able to support these payments and complete them religiously for a long period of time.
- If your loan tenure is for ten years or more, be sure you will be able to maintain paying for the amount plus the interest rate included. Nobody wants to fall into bad credit if they default on their loans.
- If in any case you become unable to pay for your monthly dues, you can still stop foreclosure by being open and honest with your lending officer or your lending institution.
- Let them know if you are currently being plagued by financial problems, such as there is an emergency, a sickness, or other immediate expense that cannot be put off.
- If you become unemployed for some reason, and your monthly income for your family is compromised, let your loaner know immediately so you can work on options that can save you from bank foreclosure.
- Don’t worry, this is not the end of the world, you have options such as refinancing your existing mortgage, or a reinstatement plan.
- When you apply for a reinstatement, this means that your subsequent monthly payments will be slightly larger, as the interest may be increased to cover for the previous months you were missing out on your monthly payments.
- The important thing to note is that to never default on your payments again. Be sure you can maintain a healthy credit score, so you can borrow again when the need arises.
- Remember that there are many mistakes people commit when they take out loans and cannot make the payments, and this gravely affects your other assets and reputation with other financial institutions.
- Be sure you research well and manage your money the right way, so you can avoid foreclosure.