A mortgage is the biggest debt most home loan borrowers will probably ever bear, and their home is probably the most expensive thing they will ever buy.

Taking a home loan and mortgage is a time-consuming process. Applicants work on their budget to gauge what they can comfortably afford, do market research to find out the most competitive home loan interest rates and low fees, and find out the lender with the lowest turnaround time for credit appraisal.

As it is very tedious, time-consuming and expensive, you cannot afford mistakes. One small mistake can make you pay far more than you should.

Your home and mortgage loan should not be a burden on you. Instead, it should make you feel financially secure for life.

How can mortgage mishap happen?

Mortgage mishap can occur when you struggle with your mortgage repayments and cannot get back on the track. Such a situation can make you lose your home, and lead to the foreclosure of the mortgage. You will not have any legal right in the property if you do not make a full payment towards your mortgage loan.

What can you do to overcome this?

  • Build an emergency fund corpus. Make sure that you have sufficient amount of surplus cash to meet exigencies. It is not just the rate of interest that you need to care about. You need money for extra fees and charges, and to avoid a financial crisis.
  • Find out ways to control extra expenses, wherever you can. This will also help you make some money that can be used to pre-pay the mortgage.
  • Cash out your stocks and investments wherever you can, to build some additional financial corpus. This makes great financial sense. This means that investments that have stopped giving high returns could be used to repay the mortgage loan.
  • Take an expert’s advice on not just your investments but also on handling loans and mortgages. You can also talk to your relationship manager at the bank/financial institution for guidance to avoid foreclosure of home loan/ mortgage when you find it difficult to make the equated monthly instalments (EMIs) payments.
  • Refinance the existing mortgage to get a better deal. If your equity in the asset/home is strong, and if you meet the eligibility guidelines of the new lender satisfactorily, switching to a new lender can be one of the ways to avoid mortgage mishap.
  • Ask for the forbearance period. If your repayment track is clean till date and if you have a genuine reason being unable to repay the home loan, with a forbearance from your lender, you can pay lower monthly instalments. Make the best use of this forbearance period to arrange funds.

Things you should avoid if you are struggling with your mortgage

  • Do not take an additional loan to get funds for repaying your This will put you at greater risk, and such loans are offered at a very high rate of interest.
  • Do not run away from the situation. You must face it. Try to work with your lender, and ask for his guidance to overcome the situation.
  • Make sure that you have all the terms and conditions of the re-worked home loan agreement in a documented form, from your lender.

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