Getting A Mortgage Payment Protection Plan

Category: Finance.

Are you having trouble paying your mortgage? Mortgage arrears often lead to repossession or foreclosure.

If you are, you should know that you may have options! If you happen to be one of those people who are falling behind in your mortgage payments, you had better shape up or lose you house. You never know, you may be able to avoid repossession or foreclosure! To help you protect your home from foreclosure due to mortgage arrears, here are some tips for you. Getting a mortgage payment protection plan. The good thing about getting mortgage protection plan is that the insurance company will assume the payment of your mortgage in case you are unable to pay for it due to illness, unemployment and other causes stipulated in the insurance policy.

There are many insurance companies all over the country that are offering mortgage payment protection plan. When getting your mortgage payment protection plan, make sure to check all the pertinent provisions in the policy. Make sure that you get a policy that has a minimum payout period of 30 days from the time of the claim. Read the fine prints in the insurance contract and if you have some questions regarding the provisions of the contract, ask the insurance underwriter to explain the provision to you. Although this type of insurance policy will cost you a bit more than those policies that has a standard minimum payout period of 3 months, with the 30 days minimum payout period, you can be sure that you will still have a roof over your head. If you have to wait for 3 months for your insurance company to start paying your mortgage, you will end up losing your home.

Note that there are some banks around the country that institute foreclosure after a client misses out two consecutive payments. Given this scenario, you cannot afford to save a few dollars off your insurance policy if you do not want to risk losing your home in the end. If you mortgage arrears are getting a bit heavy, you may need to request the bank for a debt restructuring. Ask for Loan Reconstruction. Debts restructuring means that you draw out a new loan to pay the old loan. Dont worry, most banks are open to the possibility of debt restructuring especially if you have been a good client before you lost your job or have fallen ill.

The bank will close your old loan with them and set up a new one. Besides, banks are inclined to help you pay your debts because this means that they will also be able to recover their money. For instance, you can ask the bank to give you a longer payment period for the new loan. The good thing about restructuring your loan is that you will be able to get better terms and conditions on the new loan. Note that longer payment period will help you spread the amount of the loan over a period of time thus you get you pay lower monthly amortization.