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Monday, November 30, 2009

Home Loan Relief Programs

By Scott Nicks

If you are having trouble making home loan payments and at risk of foreclosure their are a few relief programs you may be eligible for such as home loan refinance, mortgage modification, repayment plans, reinstatement, or forbearance.

With so many home owners struggling to make regular payments many homeowners are trying to find relief. The combination of a discounted property market and increasing fees is too large a burden for lots of property owners to afford.

Due to the significant growth in home loan defaults many lenders are willing to negotiate workout options with mortgage holders. If you are a property owner and in danger foreclosure you could be eligible for a restructuring of your present mortgage contract, this could happen as a result of home loan refinance or mortgage modification.

Mortgage refinancing is when a mortgage holder takes out a new mortgage with improved terms and utilizes the proceeds to pay off the current loan. Depending on the value in your property this could be available to you.

Mortgage modification is an renegotiation between the mortgage company and borrower to modify only specific elements of an existing home loan agreement. These changes can include rate changes and normally make it easier for borrowers to keep up with their home loan amortization schedule.

There are also programs that are designed to help borrowers who have ceased making payments to get current without penalty. These options preserve the existing mortgage contract but modify it for a short time to accommodate hardship situations and are repayment plans, reinstatement, and forbearance.

A home loan repayment plan is a program that provides a grace period for delinquent mortgage holders to pay back past due regular payments with no penalties. The late payments are usually added to the monthly payments for a fixed amount of time at the end of which the home owners is paid up.

If a mortgage company allows a late home owner to pay back the past due amount in one lump sum it is called mortgage reinstatement. This can be used in combination with forbearance if a mortgage holder can prove to the lender that they will soon receive a substantial sum of money often this is a tax return or cash of a sale.

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