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In most cases, getting behind on your mortgage payments is completely understandable – to everyday common folk like yourself at least. The lender or bank on the other hand, will obviously just want you to get caught up as quickly as possible. As a last resort to collect money owed, lenders or banks who do not receive arrears payments will more than likely seek the courts approval for a ‘possession’ order. Repossession is the last thing any home owner wants. So, it is imperative you do your best to avoid it. If however, you cannot make the necessary payments to get caught, and feel the house is a complete loss; there are options available as well, which we will go over later on in the article. For now, we will go over some great advice and tips on how to get caught up with mortgage payments. Cutting down Monthly Costs If you know that your financial difficulties are only short-term, and you expect to be back on your feet within a few months time, you should ask your lender if they would agree to cut down the monthly mortgage payments. Depending on the type of mortgage you have, there are several options on what you may be able to do: •The lender might agree to reduce your monthly interest payments •In many cases, lenders will agree to extend the mortgage loan to a longer period of time, but this will include more interest payments later on down the road. •It may be optional to suspend repayments of the amount you borrowed and make interest only payments. •If you so choose, you can research and find a cheaper mortgage deal through a different lender. But, you might have to pay certain fees for changing lenders; and this includes paying off any previous arrears. Getting Caught Up Getting behind and avoiding repossession only takes one phone call to your lender and keeping them updated. In almost every case as long as your lender knows you are in financial woes, they will take steps to help you. No banking institution really wants to repossess your home, simply because they too will lose a great deal of money. It’s imperative you contact your lender and try to come to a suitable agreement that will help you pay off any arrears. But, before doing this, budgeting and working out how much you can actually afford to pay is also important. Sit down and calculate how much money you do have coming in each month; and include how much you have going out for basic living essentials. In cases like this you may find it helpful to seek help from a debt adviser. Now, it’s time to figure out how you’re going to pay off any arrears. Here are some helpful tips: •Basic budgeting comes down to a few important things. One, cutting out non-essential spending; and two, using that money to pay any extra amount towards arrears each month. If this is in fact a short-term money issue, making the necessary sacrifices will get you ahead that much quicker. •Make an arrangement with your lender to add any arrears to your capital, and opt to paying back over the remaining period of the mortgage. This will result in larger amounts being paid – so make sure it’s something you really want to do. •If your credit is still relatively unharmed, you can try and get a lump sum of money to pay off the arrears. This would require taking out a small loan – again, only do this if you know for certain you are in a short term slump. No Way Out What can you do if the situation isn't short term? Many people across the world are finding themselves in similar situations. Repossession cannot be avoided because of job loss, a divorce or even a death in the family. Mounting bills may have gotten the better of you and you’re on the brink of having your house repossessed with no other options. If this is the case, you may qualify for a ‘quick sale’ or ‘short sale’. Organizations are out there who specialize in stopping the repossession process, and making an offer on your home. They make the deal with your lender and offer to clear the debt. Although a quick sale can still affect your credit rating, its not as bad as a repossession status on the report. If you feel backed into a corner, looking into a possible quick sale may be the best option for you.
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