If you are experiencing temporary hardship that’ has caused you to miss some payments, ask your lender for a repayment plan before you start a Short Sale! What are the Repayment plans you wonder!?
Repayment plans are designed to allow the home owner to gradually catch up with the past that have been missed due to a lost a job or run into unplanned expenses. Once you review the nature of your hardship with your lender and determine that the Short Term hardship will be cured by full employment or other measures, then a Repayment plan can be tailored based on your ability to make payments.
The challenge however is that in majority of cases, the Repayment plans increase your monthly payments for a short period of time till you catch up. So, these plans do NOT make any sense if your home value is less than your Loan since you could be throwing good money after bad just to avoid a Foreclosure or to avoid a Short Sale! But if you have equity in your home that you want to protect then it might be worthwhile to explore a Repayment plan.
The plan would be developed by an Asset Manager at your bank who will tailor a payment plan that you can afford for Short Term till ALL the past due payments are recovered. Here’s how a repayment plan can make that easier:
- 1) Instead of one lump sum payment, the past due amount is spread across certain number of months.
2) During the Repayment Period, the lender adds a portion of the overdue amount to each of your regular mortgage payments.
- 3) At the end of the period your mortgage account will be up to date and you will return to paying your normal amount.
We have helped some of our clients negotiate a repayment plan with their lenders in order to protect their equity in their property. So, if you are looking for sound recommendation on what to do with your past due payments, Contact Us.