If you are failing to pay the mortgage speak to the bank or your lender. It may seem quite intimidating to approach a financial institution and tell them that you are longer in a position to commit to your repayment. One thing people need to understand is that althouth the banks may have tight policies and procedures as they do not want to loose money, these policies are made by human beings. Tough times fall on all of us , and the banks know that.
Banks are not in the business of reposses houses so they will by all means consider any circumstances that may result in you failing to meet your obligations.
Repossesing a property is a very costly legal process and banks would rather consider other options . It is not their first resort to reposses a property. Non payment of credit is something they do not tolerate as they need to make a profit for shareholders. When you are aware that your financial position is taking a down turn, make an appointment with your consultant or make a telephonic conversation to discuss what options are available to you.
So being proactive is the first thing! Don’t wait until you actually default in order to speak to the bank. You will find the banks will call within days of your initial default to obtain a commitment from you to make the payment. Unless your consultant has experienced such a case before, it may take long to get the information and assistants you need but you will eventually get the decision makers. You will have to explain the nature of your difficult and propose how you still intend to honour your debt. There are two common solutions which the banks may offer. The first is that the bank may offer you a ‘holiday period’. This is a time you are given a leave from paying for the next 1-6months until you are back on your feet and be able to meet to your repayments as expected. In this case interest would still be calculate on your home loan amount this may result in it being higher. The other option is banks may consider extending your mortgage period to 30years if it was 20/25 years. This option gives you relief that it lowers your monthly repayment but it does mean you will have paid more interest at the end of the full term.
Please be advised that if your position changes again , it makes better financial sense to go back to the origianal mortgage repayment plan that was intial offered to you. Do not get comfortable paying lower repayments . It is better to catch up on your shortfall than to end up with some excess that may be spent on unnecessay luxuries.