Sometimes, you need help keeping up with your home loan payments.
The good news is that you have available legal options to find a solution that fits your financial situation.
Loan modification
Renegotiating our existing home loan can make it more manageable. This process could include reducing the interest rate and extending the loan term or principal forbearance. To pursue a loan modification, contact your loan servicer when you foresee difficulties meeting your payment obligations. Be prepared to provide detailed information about your financial situation and why a modification is necessary.
Forbearance agreement
A forbearance agreement might be viable if your financial hardship is temporary. With forbearance, your lender allows you to pause or reduce your mortgage payments temporarily. You can resume regular payments when your financial situation improves. Communicate openly with your lender. Explain the reasons for your hardship and propose a feasible plan for catching up on missed payments.
Repayment plan
A repayment plan involves spreading out your missed payments over an agreed-upon period. This avenue allows you to catch up without facing a lump-sum payment. Like other options, communication is key. Submit a realistic repayment plan to your lender and demonstrate your commitment to meeting the revised terms.
Refinancing
If your credit has improved or interest rates have decreased since obtaining your current loan, refinance by replacing your existing loan. Aim for better terms and lower monthly payments. However, this option may require a good credit score and sufficient home equity.
Partial claim
A partial claim is a potential solution for those with loans insured by the Federal Housing Administration. This option involves obtaining a one-time payment from the FHA to bring your mortgage current. It is important to meet specific eligibility criteria, and you must repay the amount received when you sell the property or pay off the mortgage.
The Maryland Department of Housing and Community Development has helped 11,000 homeowners behind on housing payments. Exploring legal options for home loan modifications can help you achieve financial stability. Early intervention can increase the likelihood of finding a suitable solution.
