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Manage your mortgage

There are many little nuances that come with owning a home, many things that are probably not even thought about until the problem arrives. The same can be said with your mortgage. Not everything is black and white.

Managing Your Mortgage,” an article published by mortgage-x.com, explains why you have to be prepared for just about everything when you own a home.

“Acquiring your first home, or a larger one to meet growing family needs, usually focuses all of your attention on accumulating the down payment and qualifying for the financing on the property you have selected. There is a sense of relief when the loan is finally closed and you have settled in the house. It will not take long, however, before you will have to face the financial responsibilities that home ownership imposes.”

Be prepared. Owning a home is expensive. That sounds like an obvious statement, but many first time buyers neglect to think about the “other” expenses. These other expenses include plumbing, yard maintenance, water heater, kitchen appliances, etc.

These expenses usually affect first time buyers more because they are used to landlords or parents paying for them. And first time buyers usually have low cash flow to begin with.

What does this have to do with managing your mortgage? Fixing a water heater or buying a new stove can cost thousands of dollars, which can affect your monthly income status.

The worst thing you can do as a homeowner is go into default on your mortgage payments.

“While over-obligating yourself or unexpected repair bills may jeopardize your ability to keep up your house payments, the primary causes of foreclosure and bankruptcy are unanticipated personal crisis. More homeowners lose their homes because of illness, loss of employment or marital problems than all other reasons combined.”

If one of these tragedies occurs, you could be in severe risk of defaulting on your mortgage. If there is no one to help you in your time of need, churches and assistance programs may be able to help.

But these programs could only help for one-time assistance. You should always have a savings account for such emergencies.

If your mortgage becomes delinquent, you usually have some time to pay it. If you go 15 days without payment you will probably receive a notice. If you go longer than a month with no payment, you will be charged a late fee, and unless you make agreements with the lender, your home may be in jeopardy.

“When three or more mortgage loan payments are due and unpaid, the loan may be given to the lender's attorney and foreclosure proceedings initiated. The entire balance of the loan may be due and payable immediately. In addition to the loan payments due, you are liable for legal fees incurred by the lender. At this point, you are in serious danger of losing your home.”

“A loan workout plan is an agreement between you and your lender that sets out the steps to be taken to cure the delinquency and prevent loss of your home. It may be written or oral and will have specific deadlines which you must meet in order to avoid foreclosure. Therefore, it must be based on very realistic estimates of your ability to meet the plan schedule.”

There are ways to save your home if you are delinquent on payments. But this will undoubtedly lead to bad credit and higher payments.

Manage your mortgage efficiently and be prepared for financial burdens.
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