While some homeowners are finding stability in their mortgage payments and general financial life, there are still many who are in need of a reduced mortgage payment as a way to stay current on their current debt obligations. Understandably, a mortgage is usually one of the more costly debts a consumer can acquire, and as a result of factors like unemployment, which currently remains at around 9.1%, there are many who are unsure of whether they can continue to meet this particular debt obligation, let alone other financial commitments like credit cards, loans, or even ordinary bills.
However, when it comes to lowering mortgage payment costs without using popular plans like a home loan modification, many homeowners are unsure of how they may be able to accomplish this task, due to the fact that modifications are not offered for every homeowner in trouble. Obviously, homeowners may be in a position where they can pay all of their debts but could be facing a situation where their income is barely making ends meet and if an emergency were to rise this could create a great deal of problems.
When consumers face a situation where they are on tight budget and a problem arises, some turn to credit cards or sacrifice paying certain debts for a month or more as a way to handle these unforeseen situations. Yet, current conditions in the housing market may offer opportunities for some to simply refinance their mortgage, due to the fact that rates are incredibly low at the present time. Homeowners often refinance as a way to either get a lower monthly mortgage payment or shorten their mortgage terms so that the overall cost they have to pay will be much lower when they have paid off their home.
Despite the fact that a common 30-year fixed rate mortgage is currently at a little over 4%, with shorter term mortgages coming in much lower, this does not mean that every homeowner can qualify for a lower rate and take advantage of affordability benefits that may come from doing so. Also, when it comes to closing on a mortgage refinance agreement, some homeowners have found that it’s more costly to do so and may be beyond their means at the present time.
Yet, banks may be willing to work with homeowners in some areas of refinancing, as some costs may be added on to a homeowner’s total mortgage, meaning a homeowner’s mortgage principal, which could cause the overall mortgage costs a homeowner pays to increase, but it has been one way that some homeowners have been able to find more affordability. For homeowners who have fallen behind on their mortgage payments, there are options like reinstatement programs that may be available from certain state housing agencies and programs that may offer a homeowner a forbearance option on their mortgage payment when factors like unemployment are in place.
While refinancing or programs tailored to assist unemployed homeowners through either forbearance options, dischargeable loans, or even payment assistance can help some, homeowners who are current on their mortgage payment have found that these opportunities may be more difficult to come by, as some servicers are only focused on helping homeowners who run the risk of defaulting or facing foreclosure, but are in a situation where this could be preventable.
Some mortgage services will help homeowners who are financially distressed but it may benefit a homeowner more to speak with a credit counseling agency or have a financial adviser look at their situation to see if there are options to reduce a homeowner’s debt, manage their income in a way that will allow them to better pay debt obligations, or simply cut costs that are unnecessary at the present time. Modifications have been helpful for many homeowners over the past months, but they are not for everyone and, despite the fact that there are no clear-cut alternatives, there are options outside of these modification initiatives through either refinancing, credit counseling, or even state-specific programs that may be of some use to homeowners at the present time.