Upside-Down in Mortgage - What to Do

In life, a person can never be too certain about things. A person may be a billionaire for the first half of his or her life. But due to unfortunate events like death of loved one, lawsuits, illness and other forms of hardships, life could turn upside down. The once millionaire, who lived life with fame and fortune, can turn out to be a struggling, almost penniless person, who can barely put food on the table.

The example may sound exaggerated but this can happen in the real world. This can even happen in countries, where the economy is not doing well. A high earning individual may lose everything because he or she loses his job. And these things are beyond one's control. The only thing left to do is to try to go back to basic and take things one step at a time until one is able to stand on his or her own feet again.

This is the same concept that you need to apply in mortgage. Everything mentioned is related to this type of loan. A person getting mortgage and seemed so sure that he or she can afford the monthly payment could end up getting into trouble due to hardships in life. Things that are not expected could push you from where you are standing and create a domino effect in your life. In this case, you can lose your home.

But when you are struggling with your mortgage, you can always do something to save your homes. On the other hand, if saving the home seems too blurry, you can always do something to lessen the damage it can bring to your reputation (i.e. Credit report).

Here are some tips to do:

1. Talk to your lender. Let them be aware of your current situation so that they can give you time or grace period for you to come up with the unpaid dues. You can enter in a forbearance agreement with your lender so that they can temporarily suspend or reduce payments for a particular span of time.

2. If the rates seem very expensive, the next thing you can opt for is to loans.blogspot.com/" title="refinance loans">refinance. This time, shop around for the best rates or package that you think is within your capacity to pay.

3. Engage in a short sale. One need not undergo foreclosure to get this as an option. A person just needs to make a request and present a proof of hardship to be granted of short sale. Although this has the same negative impact to your credit report but one can easily buy a house in a few years time. It is way better than foreclosure.

4. Consolidate your debts. This is another tactic to reduce your monthly payments due to lower rates and tax exemptions but the payback time will be longer.

5. Loan Modification is also an option. If you are able to prove your inability to pay the debt back due to uncontrollable factors, then a lender will most likely approve of this.

Source: http://lifeinsurancecalculatorsblog.blogspot.com/2010/08/upside-down-in-mortgage-what-to-do.html