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In this time of economic uncertainty many people are getting into financial trouble.  This puts a lot of stress on family life and can mean a lot of sleepless nights.  People are losing their jobs and finding it harder and harder to get a new one.   With a reduced income many homeowners are facing the distinct possibility of losing their homes through foreclosure.  What can a homeowner do if they find themselves in this type of situation?  The solution is to work with your lender.

If you get into financial difficulties the first thing you should do is communicate this directly with your lender.  They can work with you to find a solution.  If you go into foreclosure the lender will lose money.  Therefore it is in their best interest to help you find a solution.

They can help you develop a loan modification.  What this is a plan based on your present situation to get you back on track.  The lender will base this on the value of your property and what type of financial problems you have.  They will classify them as either temporary or long term difficulties.

A short term or temporary indulgence is usually considered to be under sixty days in length.  This is for people with a temporary decline in income, say when moving between jobs or the like.  In a case like this a repayment plan may be organized if your income will revert back to previous levels within sixty days.  You will revert to your regular mortgage payments along with additional ones to cover the amounts you missed.  This usually has to be paid off in one to two years.

If its going to be a longer period without making a payment payments may be suspended under the form of a forbearance plan.    The payments may be suspended or reduced in amount during this period.  The goal is to help you keep your home while you get your finances back in order.

Article courtesy of Mortgage Calculator

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