Have you taken a mortgage on your house? Many people do that because it is the best way to finance the home and help build up an asset. However, you should be very careful that you do not default on your payments to the lender because this is certain to lead to unhappy and far reaching consequences. The years 2008 to 2010 have witnessed a rise in incidences of mortgage payment defaults, and the subsequent repossession of homes all over the United States. Make sure that you do not join this growing list by taking some precautions of your own.

The job market is completely unpredictable and that unfortunately is the only thing you can be sure of. You therefore have to be prepared to face the eventuality that you might lose your job for no fault of yours. You need to have a backup plan in place so that you can protect your home from being repossessed due to payment default.

At the very outset, you have to remember to keep a cool head because most people are apt to make sudden and erratic decisions in the heat of the moment. You must keep in mind that the lender is as eager as you are that payments are made on time. They do not want a white elephant in the form of a repossessed home on their hands very simply because they are in the finance business and not in real estate. Since it is in everybody’s best interest that there be no mortgage default, you might be able to work with them to find a solution to your problem.

If you are facing a funds shortage, the first thing to do is look at ways you can generate quick money. You could raise a loan from other reliable sources, a family member for example. You could also look at supplementing your income with a part time job. If you are still falling short, you could perhaps sell some of your possessions.

You should sit down with your lender to see if they can allow you to delay payment for a month. Most lenders levy penalties for this, but if you put in enough effort you should be able to get them to waive it off. Hopefully, you should be able to get a new job by then, and you can make the payment without too much effort.

If you are still unable to make the payments you should try to increase the tenure of your loan. Even though this will increase your interest burden, it will bring down your monthly payments to a more manageable level. You should then be able to pay it off with the money you earn from your part time jobs.

You will have to work really hard to ensure that you never default on mortgage payments. If you do, all your hard earned money will just go down the drain and you might find it very difficult to recover from this blow.

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Category: Finances
Keywords: default, mortgage payments, tenure, loan, penalties, monthly payments