Follow a few simple tips to renegotiate your mortgage and avoid foreclosure
By Myrina Stein, Financial Writer
Buying a new house is the most significant event in each and every person’s life, so you must consider several factors while buying a new house so that you can end up taking the right decision. Before buying a new house ask yourself “mortgage how much can I borrow” and take out mortgage loan accordingly. If you acquire a mortgage that you cannot afford to pay on time you will face foreclosure on your house, means you will lose your house. Foreclosure can be the most stressful financial situations for any homeowner, so to avoid it renegotiate your mortgage by following a few simple tips.
Follow the tips:
- As soon as you realize that you will not be able to pay your mortgage loan on time contact your lender. The lender will likely work with you to renegotiate your mortgage if you can demonstrate your financial concern on time.
- If you wish to renegotiate the mortgage you must obtain your credit report from the credit report bureaus like TransUnion, Equifax and Experian, Also, obtain FICO score that reflects your credit worthiness. These items are important as they will help you determine which type of mortgage is suitable for you.
- There are certain types of renegotiation that are suitable for short-term financial problems like large medical bills and there are other types of renegotiation that are suitable for long-term financial problems like wage reduction or job loss. So before renegotiating the mortgage you must assess the probable length of your financial problems so that you can obtain the right type of renegotiated mortgage for yourself.
- Before taking any decision of renegotiation consult your mortgage lender to determine whether you need to go for short-term solutions or you need to go for long-term solutions. Short-term solutions include temporary forbearance or a repayment plan to cope up with the past due payments and long term solutions include mortgage modification or refinance.
- In order to acquire the right mortgage renegotiation you must communicate with your lender about your monthly income and expenses, such as pay stubs, tax returns, alimony or child support agreements, and monthly credit card bills. This will help your lender to offer you the most suitable mortgage renegotiation.
- To renegotiate your mortgage you will have to undergo some paperwork and documentation with the lender. Your lender may require notarization of some documents.
- Once you acquire the renegotiated mortgage plan try to stick to it and make payments on time.
In conclusion, bear the above mentioned tips in mind to renegotiate your mortgage and to avoid the stressful event of foreclosure.
