When you fall behind your mortgage payments, the thought that you might lose your home may be terrifying. The reasons of falling behind can be many and most of them may be reasonable enough, but lenders with not forego the amount outstanding at any cost. In such a case you need not worry much as there are laws which can protect you as a consumer. You simply have to know the ways which will help you to save your home, recognize foreclosure scams and avoid the as well. This will help you to get rid of your anxiety and plan for your future payments.
Need To Know
It is crucial that you know the type of mortgage loan that you currently have. It will help you to find out the changes in your amount due, make necessary adjustments in your repayment schedule, arrange for the amount outstanding and much more. So, knowing the kind of mortgage will help you in many ways. If you do not know and cannot find it out by reading the documents of your mortgage that you received during settlement, you can contact your loan servicer and take help. Loan servicers know everything about your loan and can explain it clearly to you as they are responsible for the collection of your monthly payments and credit it in your account.
Hybrid Adjustable Rate Mortgages
Hybrid Adjustable Rate Mortgages or ARMs are those mortgages for which you have to pay fixed payments for few years and then it turn into an adjustable loan. ARMs can vary from bank to bank or on the amount of loan taking. You can have a 2/28 ARM or a 3/27 ARM in which you have to pay either two or three year’s payment at a fixed rate and the rest of your thirty-year tenure at an adjustable rate. You can also have 5/1 or 3/1 hybrid ARMs, depending on the bank in which the first number determines the years for which the interest of the loan is charged at fixed rate while the second number refers to how often the rate will change.
The Other Types
There are mortgage loans which have simple adjustable rates. These are those mortgages in which the interest on the principal amount is charged at adjustable rates, depending on the prevailing market rate charged, right from the very beginning of the mortgage loan. This means that your due payment will keep on changing over time, as and when specified. There are also some mortgages which have a fixed rate of interest charged for the amount outstanding for the whole life of the loan. Your payment will only change when there is a change in your insurance and taxes when you have an escrow account with the loan servicer.
Deal With Payments
To avoid foreclosure, you must deal with your payment precisely and promptly when you find that you are in trouble paying your bills. You may ask your lender for a refinancing of your loan to a fixed rate loan for which you must know and review your loan contact first to find whether or not there are any prepayment penalties. You can visit here to find different online calculators to help you in determining your payments.