Hallfinancial.com Refinancing-Mortgage
When the term “mortgage” is uttered, you may only think of the interest rate and how many payments you have to make. There is also the contractual aspect. A mortgage is a contract between the lender and you. The lender gave money to you and you used it to purchase your home. You also agreed to repay that money over a set period of time plus interest.
When bad times take their toll on your finances, if interest rates are falling, common sense tells you to refinance your mortgage. The problem is that refinancing is not the only option available. If you are having difficulty making ends meet, you can always renegotiate the terms of your mortgage contract. Despite the negative perception of lenders, they do not want to foreclose on your home. In fact, they hate foreclosing.
Given this situation, your best option is to start the renegotiating process before they file the foreclosure papers. Once you figure out you cannot continue to make your payments, you should contact your lender at once. They will likely respect you for being honest about your circumstances and be more willing to work with you. You want to prove the basis of your inability to be fiscally responsible for your mortgage.
Gather all of your major financial documents and statements, such as pay stubs, tax returns, credit card bills, etc. Numbers speak for themselves. While you may feel embarrassed about admitting the truth of your finances, you will establish credibility with your lender. You will also have a solid basis from which to negotiate.
Also useful in this scenario would be investigating programs that are available to help distressed borrowers. There may be government assistance available. Federal housing programs such as the Home Affordability Modification Program or HAMP may be appropriate. HAMP is a loan modification program designed to help at-risk borrowers reduce their monthly payments.
While HAMP is a viable program, private mortgage modification efforts are also attractive. For example, the five largest lenders in the United States have modified over three million mortgages. However, HAMP-sponsored mortgages account for only 7% of that total. An alternative is HOPE NOW, a coalition of private lenders, service providers and housing counselors. The program claims that it can give you faster answers than other sources.
Even if some programs assure you of speed in handling your concerns and questions, the bottom line is how much your monthly payment will be reduced. That should be your sole focus during your search for assistance. Your goal is to have your obligation lowered by 10% or more. Modifications that are 10% or greater have a much better chance of staying current.
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