Options for Postponing Mortgage Payments

Most lenders are willing to help borrowers who find it difficult to meet their scheduled mortgage dues. Initiating foreclosure proceedings against a homeowner is expensive and demanding for a lender. Lenders look for various options until the homeowners can tide over their current financial difficulties. Here are some deferment payment options that lenders extend to their clients.

Forbearance Alternative

Under this plan, a lender consents to either reduce or suspend the mortgage payments of the homeowner for a specific duration. Forbearance is a practical preventive measure that a lender may allow a borrower who anticipates a difficulty in meeting mortgage payments for a brief period. After the forbearance period, the borrower will have to resume the regular payments and recompense the unpaid amounts, as well.

Repayment Plan

The Department of Housing and Urban Development (HUD) of the USA specifies that a borrower should call the mortgage lender directly after missing a mortgage repayment. This move on the part of the borrower can avert foreclosure. The Federal Trade Commission (FTC) declares that lenders often follow a repayment procedure in which a borrower can pay the missed due sum by adding small portions to the subsequent scheduled mortgage payments.

Mortgage Term Extension

A lender may extend the term of the mortgage for a distressed borrower, in addition to allowing a few missed payments. The homeowner can continue with the subsequent mortgage repayments after a financial recovery. The lender permits the borrower to make the delinquent payments at the end of the loan period, thereby increasing the loan period. This plan is suitable for a borrower who is less than three months late on the mortgage dues.

Reinstatement Plan

The lender allows a borrower to miss the mortgage repayments during a financial crisis. A reinstatement involves the payment of the entire missed amount, the interest accrued and the penalties on a specific date.

Balloon Payment of the Loan

The options listed above are suitable for homeowners with temporary difficulties in meeting their mortgage dues. A lender may offer an assistance program involving a balloon payment to a borrower looking for an enduring solution to mortgage repayment difficulties. A long-term way out can be a modification of the mortgage. The lender reduces the principal payments for the monthly reimbursements. This makes the monthly payments manageable for the homeowner. However, the borrower will have to resort to a balloon payment of the principal at the end of the loan term.

Deciding on an Escrow Account after a Refinance

The monthly mortgage dues of a borrower consist of homeowner’s insurance, private mortgage insurance and property taxes apart from the mortgage principal and interest payments. Lenders require that you pay the insurance amounts and the property taxes in an escrow account held by a third party called escrow services....

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HUD Guidelines for Manufactured Homes

A set of directives prepared by the Department of Housing and Urban Development (HUD) may have served to enhance the quality of manufactured homes. Homebuyers are quite willing to apply for mortgages for this highly affordable quality of housing. Here are the key guiding principles put forward by the...

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