CTET Finance

Whenever you read a general article about mortgages the term foreclosure is oftentimes accompanying it. Millions all over our great country are unemployed and struggling. Millions are at risk of losing their homes right under their feet. The news doesn’t provide much comfort too. Many powerful officials have speculated that the house market is going to get worse before it gets better.

In order to find a solution to the problem one needs to understand what a mortgage is. Webster defines mortgage as, the pledging of property to a creditor as security for the payment of a debt.Which in simple terms means buying your house through a bank via a loan, and if you default in payments the bank has the right to seize back the property. With having to pay back to the bank, there are legal litigations that have to be filed. The litigations state that if you default for a consecutive period of time the bank can then take ownership over your property. There are a few things we can do to cease the foreclosure on our own property. We can choose to refinance, apply for a reverse mortgage, or a loan modification.

Refinancing your mortgage means paying off your existing mortgage and signing a loan to get a new mortgage. Many people choose to refinance their mortgage in hopes of getting a lower percentage of interest added to their current amount. When considering refinancing your property read all fine print with your contract and try to obtain a rate between 2-4%. Refinancing is supposed to drop the rate of interest you pay on your property yearly and therefore reduce your monthly mortgage rate.

A reverse mortgage is beneficial to senior citizens. If you are 62 or older, own your home, have a low mortgage, and reside in your dwelling. Reverse mortgage may be the answer to your prayers! A reverse mortgage allows you to transform a bit of your equity into cash and pay off your existing mortgage. And, you simply do not need to repay until the home is not occupied by the owner or they die. Money from the reverse mortgage is considered tax free and is considered income. A few downfalls of the reverse mortgage loan however, is the debt on the property increases, equity disappears at a fast rate, and it’s very expensive to apply.

A new trend in helping to solve the foreclosure dilemma is loan modifications. Loan modifications enable you to find an affordable mortgage payment for your situation. Loan modifications eliminate the spending and hours of reapplying for another loan by simply changing the terms of your existing mortgage. In order to be considered for a loan modification you have to provide proof of a financial hardship, be 3 or more payments delinquent on your mortgage, and have not filed bankruptcy. Applying is simple as well; you just go to the lender or primary service that owns your mortgage.

Through minimal research we have been able to provide you with 3 ways to solve your mortgage worries. Whichever one suites you is worth a try, if it will provide your family with a stable home environment. With the economy in shambles, no one really knows what more is to come. The welfare of yourself and your family is at risk.

Bart writes articles about finance and mortgages. He also writes about lening met BKR and lening, krediet en geldzaken in Dutch.