The economic slump that hit the country as well as other parts of the world in 2008 and 2009 left many homeowners reeling as they struggled to cope with the rise in living expenditure and at the same time they had to deal with unfavourable conditions such as pay cuts and some even retrenchment! As a result, many are left struggling to service their mortgage loans, and have defaulted by missing several months of their mortgage loan payments. My colleague Charles was one such person that was caught in this predicament and required help with mortgage payments. He required help with mortgage payments as he experienced a massive pay cut (almost 60%), and had other commitments such as his health insurance premium and his vehicle to look after in addition to his mortgage loan. As a result, he was facing the reality of having his home seized by his lenders through foreclosure by narrowly getting his application for home refinancing approved just days before his home was seized. He managed to negotiate with another lender and obtained a low-interest mortgage refinancing package that instantly lowered his monthly repayment amount.

Just like Charles, if you are facing difficulties in servicing your mortgage loan due to unforeseeable reasons, do not fret as there is mortgage help available out there for you. In addition to home refinancing packages that might help you lower your mortgage loan monthly repayment amount, there are a few more options that you could explore as listed below:

● The home equity loan option – if you own equity in the home that you are currently living in, why not take advantage of this equity that you own? If you are not aware of it yet, you could obtain a home equity loan against the amount of equity that you currently possess in your home, and utilize this amount to help you catch up on the missed payments on the monthly mortgage payments. You could even utilize this home equity loan to eliminate other debts such as credit card debt or your vehicle loan.

● The home equity line of credit (HELOC) – contrary to the home equity loan that provides you a lump sum amount, the HELOC option allows you to open a line of credit that you can borrow from when the need arises. You could borrow as many times as you wish from this line of credit that is backed by the equity that you own, but you would need to pay off the previous amount first before borrowing again.

● The Making Home Affordable (MHA) program – introduced by President Obama. This program was brought into existence to aid struggling home owners cope better with their mortgage loans. It also allows them to refinance or modify their existing mortgage loans if they are unable to cope with their current monthly repayment amounts to avoid foreclosure from taking place. The Home Affordable Refinance Program (HARP) helps homeowners that have no equity in their homes refinance their homes, as long as the property’s initial value is not more than 125% compared to the property’s current value. Under this program, homeowners would be able to refinance their homes with lower interest rates successfully. The Home Affordable Modification Program (HAMP) is another plan under the MHA banner, and it helps homeowners modify and alter their current mortgage loans to suit their current financial situation better. Homeowners could seek loans with lower interest rates, or try to extend the tenure of their mortgage loans.

You can rest assured that mortgage loan help is available for you, as long as you know where to look and how to explore the options available to you successfully. You may want to keep foreclosure at bay without too much of a hassle by exploring one of the options that is listed above, and live in your home happily for the foreseeable future! All the best!

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Category: Finances
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