A mortgage represents along-term monthly financial commitment that can stretch for 10-30 years, depending on the tenure you have opted for. During this period, if you face financial difficulties for various reasons like a loss of job, divorce, illness etc. it can result in unintended defaults on your monthly mortgage payments.
An important feature of your mortgage contract is regularity in payments to the lender. This helps increase your trust worthiness as well as your credit worthiness. Timely payments prevent default, save penalties and the possible foreclosure of your home loan.
But all is not lost in case you default in payments for a short while. There are ways to salvage the situation and get back on track with your payments. We’re expert mortgage brokers Melbourne, and we’ve seen that the following are some of the best ways to tide over challenging financial situations:
Keep Your Lender Informed
It always works to your advantage to keep your lender aware of difficulties in making payments, whenever they occur. If you fail to pay for a long time, the lender would have to categorize your loan as a non-performing loan and they do not want that risk. They are more interested in helping you with solutions so that you are able to make payments on time.
A Repayment Plan?
A repayment plan involves working out a schedule that includes repayment of the unpaid amount spread out over a specific period of time. This is in addition to the regular monthly payments. It is based on the assumption that you now have an improved ability to pay. Remember you are paying more interest amount in this reworked plan.
Extra Cash Put To Use
Any extra cash diverted towards covering the late payments can be a better way of managing late payments. But be careful. It is useful to consult a trusted financial adviser like the ones at Home Loan Comparison co. They will help you with your budgeting by placing before you a correct picture of your overall financial commitments before you let go this cash. This will also prevent you from defaulting on other loans if any.
Lender’s Forbearance
This is a small window of adjustment that can be explored with the lender if your late payments (for a month or two) are due to temporary financial hardship. Under this facility, the lender has the authority to suspend or reduce your monthly mortgage payments for a specific period of time.
You need to present to the lender truthful financial information to prove your inability to make payments and enough evidence based on documentation to help them determine whether you qualify for forbearance.
If you want to know more, don’t hesitate to contact us at Home Loan Comparison co on 0419 856 669.