Tips on Negotiating Late Payments With Mortgage Lenders

Friday, November 13th, 2009 at 8:59 am  
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Many home owners often find themselves in a financial bind making the home loan difficult or hard to pay on time. This is a bad place to be for anyone because late mortgage payments will drop your credit score and cause you to have to pay late fees that can add up very quickly.

Negotiating Late Payments With Mortgage Lenders

The first thing that you as a home owner should do when you know your are facing financial problems is call your mortgage lender or whoever services your loan and workout a repayment plan or payment modification. The last thing your lender wants is your house back, most lenders will work out some sort of plan with you in order to keep your credit score safe and your home out of foreclosure.

What Should You Tell Them

Explain to the lender in detail what caused the circumstances you are now in and what if anything you are doing to work yourself out of the mess. You should also provide them with a time frame of how long you think it will take you to get back on your feet financially.

In a rare instance they may chose to do nothing for you but as long as you have been a good paying customer that is very rare. In most cases they will more then likely either adjust your payment for a period of time to allow you to catch up or even allow you to skip a payment or two.

However you must keep in mind that you still owe the money and it will be added to the term of the loan. So if you skip two months payments your loan will be two months longer in the end.

If they reduce your payment amount down they will generally want you to make it up within a years time by adding an extra amount to your payments after you get back in control.

If you are struggling as a direct result of an adjustable rate mortgage increasing the lender may offer you a fixed rate or give you an extended fixed rate period on the ARM. Changing the loan terms of a mortgage is referred to as a loan modification and is currently quite common.

By: Darin Sewell

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Bad Credit House Loans – Why Refinancing is a Challenge For Borrowers

Wednesday, July 1st, 2009 at 8:29 am  
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In todays tough financial times many homeowners have slipped into having bad credit. With the rise in gas, food and everything else many people are finding it hard to pay bills on time. Combine this with the large amount of adjustable mortgages getting ready to increase and the drop in property values many people are heading for disaster

Although just a few years ago bad credit house loans were readily available through lenders that offered a huge variety of programs that let people finance 100% of their homes value with low credit scores, recent bankruptcies and even without actually proving their incomes. Many of these sub prime loans were also written with very inflated appraised values.

Today though is a different story for people looking to refinance with bad credit. Most of the sub prime lenders have all but disappeared and the ones that are left no longer offer the aggressive programs that let these borrowers buy their homes in the first place. To make matters worse lenders are frequently reducing the homes appraised values to protect themselves in the event a borrower defaults.

The FHA has stepped in to try and help these borrowers but even the credit score requirements for an FHA loan have increased to the 580-600 range.

In addition to higher credit score FHA requires the last 12 months mortgage payments to be paid on time. While an FHA loan may help some home owners it does not help anyone with a lower credit score and possibly a one or a few missed 30 day late payments.

If you are trying to refinance to save your home or reduce the burden of an adjustable mortgage your best bet is to call you lender and see if they will either give you a longer fixed rate period on your adjustable loan or modify your mortgage to a fixed rate. With todays tight lending market and reduced property values this may be the best option for bad credit home owners who are unable to refinance.

By: Darin Sewell

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