If you are coming to the realization that your financial situation is about to cause you to go into mortgage default, then you will want to read this article. Like all homeowners, you are going to want to stop foreclosure, and save your house. Well my friend, there are some things you need to do before you contact your bank for mortgage refinance rates, so let’s get busy.
Get your act together
Make sure to know the state of your finances before contacting your mortgage help department at your bank, or lender. Sit down and figure out your income and expenses, much like when you were first being approved for your original mortgage loan. Determine how much income you have each month, how much you are paying in bills, where you can cut costs, and how much you can now afford for your mortgage refinance. Look in the yellow pages for a nonprofit counseling service to help you put this together, often this financial analysis can be done for free. In most cases, the counselor will also be able to help negotiate your mortgage refinance rates with your lender.
Once you have all your financial information together now is the time to contact your lender, you will have an idea of what you need to refinance your mortgage and avoid mortgage default. In most situations, this can be handled by phone, and sometimes you may need to set an appointment to go talk with a bank officer about mortgage refinance help. Be prepared; tell them what your situation is, what you can do, and what you can offer to help the situation.
Be ready to come up with an answer to the lender’s question of how you propose to pay off the loan. They want their money back and you want to keep your house, so you are both motivated negotiators. You will be better off submitting an initial proposal, this way you appear motivated and responsible, ready and willing to negotiate the best mortgage refinance rate for your situation. You have opened the door in the negotiation, and the lender will be more than willing to discuss refinancing your mortgage rather than let it go into default, that will cost them more money and lose you your house through foreclosure.
Talk to the people before it gets ugly
If you think that your financial situation is temporary, ask the lender for forbearance, or a postponement of payments, for a couple of months until your finances recover. You must be able to show that you will recover, and that you will be able to make up any accrued interest, but it would be better than penalties and legal action.
Now here is a common area of concern, if your adjustable rate mortgage reset and you cannot meet the new mortgage rates higher monthly payments, request a loan modification from the lender. Just like before, they will request a complete financial history from you, detailing your income and monthly expenses. The lender is going to need to see improvement in your income to justify a mortgage loan modification, remember; they want their money back and you want to keep your house. Have some proof ready to show them that you can make the payments if they switched your mortgage to a fixed-rate mortgage, and you are more likely to get a mortgage loan rate modification
Try to avoid mortgage default, start to renegotiate your mortgage loan for a lower monthly payment before you have to start missing payments. If your monthly mortgage payment becomes too much to handle, start negotiating mortgage refinance rates and a loan modification before you get into litigation. A loan modification allows you to negotiate with your mortgage lender for a change in the mortgage, with terms that reduce your payment, and this helps you avoid foreclosure.
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