Renegotiate mortgage terms to lower monthly payments
If you sense that you are about to fall behind on your mortgage or is already behind, you can try to renegotiate mortgage terms to lower monthly payments. With Citigroup and JPMorgan Chase announcing moratoriums on home mortgage foreclosures and others likely to follow, you stand a rather high chance to successfully renegotiate your mortgage loan rates and/or amortization. How to do that? Just call your lender, and explain the situation you are in, whatever it may be, e.g. illness, job loss, jump in your adjustable interest rate. Be straight forward and emphasise that if the terms are not renegotiated you may be looking to file for Chapter 7 bankruptcy. Be prepared to back up your statement by furnishing a proof of job loss, bank statements, etc.
Depending on your situation, the lender might
- help you stay current by reducing your monthly payment for extended period of time - anywhere from 6 to 24 months, and afterwards, when your situation improves, increase your monthly payments to get its money back
- negotiate a temporarily deferred mortgage plan by either, allowing you to make interest only payments and adding principal to your loan or by substantially lowering you interest rate and adding unpaid portion to your loan
- refinance with lower fixed rate, or reamortize you mortgage from a 30 year amortization to a 40 and even a 50 year amortization
- reduce your mortgage - in certain cases if your home value has substantially decreased and you have little equity in your house, you have even less incentive to stay and struggle
Some suggest that it is better to call before you fall behind, others that by paying late or being in default you substantially increase your chances to have the lender agree to renegotiate. Consider your situation carefully and decide for your self. Set the terms you can meet. Once lender agrees and you get a new mortgage, pay on time.
See,
Should you refinance now or do loan modification
Mortgage modification program doesn't work
Stopping foreclosure - mortgage modification
Fri Feb 13, 2009 11:02PM | Copyright: www.bad-credit-advisor.com | More in Mortgage | Comments (0)
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