Carefully explained below are the issues to consider to become consistent in home loan repayment: -
When did you begin defaulting?
The first thing that you should work out is the how long it has been since you have been falling behind in your home loan repayments. A lender may only let defaults last for a couple of months before beginning with proceedings to foreclose on your home. The more time you are in default; the more you will have to repay if you want to bring the unpaid money up to date, plus pay any fees which can be applied by the lender.
How Much Does it Cost to Get Out of Default?
The initial cost to return your home loan repayments back to normal will usually require paying all of the repayments that have been previously missed. Some banks or loan companies are willing to work together with you to assist in making the payments; and may offer a large initial payment on the payments you have missed, followed by an increase the monthly payments to make up the difference from what was in arrears, and what was not included in the initial repayment. While in some cases this can be more of a financial burden for a few months, this can be a great way to get out of your home loan default. The only way you can really know the exact dollar value of your home loan default is to ask your lender directly, as there may be account keeping fees, late fees or legal costs and other expenses you will need to add to your default amount. When you know the exact cost you will then be able to create a realistic plan to pay it off.
Do you have enough time to get out of your home loan default?
This always depends on your lenders terms and you will need to contact them to find out exactly. If your default has been extended for over a three month period your lender may need the full debt on your home to be recalled. In this case it means you will need to pay for your entire loan, not just the arrears. Again the only way to know if this is true in your case to discuss your options with your home loan provider.
If your home loan is in default the time is always ticking. The faster you act, the better the chance you can recover negotiate with your lender or find an alternate solution. As a general rule you will have between three and six months before legal action is taken by the lender to take control of your property.
Often the best course of action in these circumstances is to use the services of a home loan broker who specializes in Home Loans in default, as they may be able to negotiate a better solution to regain your home loan. These solutions may include negotiating with the lender on your behalf, or finding alternate finance with a debt consolidation loan or other low interest finance to help reduce your monthly repayments.