There are countless stories on the Internet and other media that tell the details of homeowners tricked by predatory lenders into accepting loans that caused them to lose their home. These stories are tragic, but the homeowners who are not mentioned are the ones who have paid on their homes for 15-20 years and suddenly find themselves in a position they never expected. It does not always take a market collapse or natural disaster to create a situation where the money for the mortgage is not readily available. Sometimes it is a temporary layoff or a small medical emergency or any number of other incidents that lead to late or missing payments and a growing risk of a home entering foreclosure. Luckily, there are some options available for homeowners who already have an affordable mortgage but need a little assistance to get back on track.
Borrowing From Themselves
Homeowners with a whole life insurance policy can borrow against the cash value of their policy. It is important to discuss the matter with the insurance agent to understand how this will impact the policy. Understand the details of the loan including the interest rate, the potential threat to the death benefit and the risk of the policy lapsing before making any withdrawal. Another possibility is borrowing against a 401K. Again, this is risky because it requires the borrower to pay back the money or lose the funds they have saved for their retirement. It is also not an option for individuals who are not planning to remain with their employer throughout the duration of the loan or the entire loan balance could be due immediately. One problem with both of these loan options is that the loan amount is limited to the value of the accounts.
Borrowing From Banks
Someone behind on their mortgage may feel as is this option is not possible, but there are still lenders that are willing to help. If the amount due to the mortgage company is a relatively small amount, say $5,000 or less, a personal loan may provide the solution. Many local banks and credit unions will approve small loans to borrowers without perfect credit. They will review what caused the late payments, check to see if other bills are paid on time and confirm employment. They may require collateral or a co-signer if the credit rating is very low, but they offer the opportunity to catch up on the mortgage and improve credit scores at the same time.
Getting Federal Help
More attention has been given to government programs that assist homeowners after the mortgage crisis in 2008. Many homeowners ignore these options if they are not struggling due to a predatory loan. However, the programs are available to help people who may potentially lose their homes for any reason. Some programs help to reduce the interest rate, and some lower payment amounts by lengthening the loan. There are many types of grants and other types of programs available, and there are local offices in every state to make them convenient for homeowners to contact.
Losing a home is financially and emotionally devastating. No one wins when a foreclosure occurs. Banks are left with homes they do not want, neighborhoods lose value when a house sits abandoned and families lose their shelter and their dreams. A run of bad luck does not need to lead to this type of loss. Being proactive about finding solutions is often all it takes to stop a home from being lost. If a layoff occurs, find help early before the bills get too far out of control.
For more information, contact I Want A Better Mortgage or a similar company.Share