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Oct 15

Is Mortgage Repayment the Right Option for You?

The second last and much awaited article in our series on important terms used in the mortgage industry has finally arrived. In this article, we shall discuss mortgage repayment, its benefits, and if it is the right option for you.

Are You Eligible For Reinstatement?

Homeowners who suffer a short term financial hardship and miss a few payments  usually struggle to resolve the mortgage they owe to the lender. After all, those coming out of a financial hardship are already pressed for money, and cannot be expected to completely pay off all the missed payments in a lump sum. The lenders also realize this, and that is why they also consider mortgage repayment as a viable option.

Mortgage repayment is a mutually beneficial arrangement for the lender and the borrower. The borrower gets to pay off the amount owed by adding it to their current mortgage, and by spreading it over an agreed upon time frame. In this way, the homeowner has to make a larger monthly payment for a few months, but the past-due amount is resolved during that time.

 

 

Following are some of the basic elements that qualify a homeowner for mortgage repayment. You may qualify for repayment if:

  1. You can afford your monthly payment from now on.
  2. You are only a few months behind on your payments.
  3. You do not wish to refinance (or are ineligible for refinance).
  4. You are, or were (during the time of the missed payments), facing a short term financial setback.
  5. You have extra income and are able to make a larger payment to satisfy the repayment plan.

You will need your complete financial documents, along with a financial hardship letter in order to explain your current financial situation. The repayment agreement between you and the lender would clearly state the time period in which you can repay your debt. You should be careful when agreeing to a time period as you do not want to make promises you can’t keep.

You can also download our Hardship Letter Writing Guide to help you get started.

Some homeowners in similar situations can also qualify for mortgage refinance, or a loan modification. The foreclosure attorneys at Amerihope Alliance Legal Services recommend repayment as the right option for homeowners who are satisfied with their current mortgage and interest rates.

It is a good idea in any case to get a free consultation, so that you may know which option is best suited for your case.

For more information visit our blog, contact us at 877-882-5338.

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