A new report released by CML (Council of Mortgage Lenders), property repossessions slightly decreased during the second quarter of 2011, with a difference of 100. The fall equates to 7 percent drop. This sounds like a good news considering that the number of the said quarter is higher than that of the last quarter of 2010, from 7,900 to 9,000.
The director general of Paul Smee attributed to the decrease of the mortgage repayments, lower mortgage interest rates, and a more positive outlook in employment. Moreover, lenders have become more considerate to homeowners, many of which prefer to help them keep their properties than let them go through repossession.
Top Things You Can Do to Avoid Repossessions
Repossessions normally happen when you can no longer afford to pay off your mortgage. In the end, you go on default. In order for the lender to recoup the losses, however, your property is repossessed so he can sell it and recover at least the principal debt.
This process is time-consuming, taxing, not to mention physically and emotionally distressing, particularly to the borrower. Nevertheless, there are a lot of ways on how you can avoid repossessions, such as the following:
Pay off your mortgage on time. Though it’s possible to delay your repayments even to 60 days, you’re still going to pay a lot because of other charges such as late fees. Besides, late repayments can have such an impact in your credit history. It can bring down your credit score, making it harder for you to apply for better mortgage interest rates as well as mortgage refinance.
Consider either a debt consolidation or refinance mortgage.Debt consolidation is more ideal if you have two or more big loans. On the other hand, if your concern is your mortgage only and you have considerable equity, you can apply for a refinance mortgage. It does pay, though, to hear out the opinions of experts. You can search for an authentic professional credit counselor to help you out.
Speaking of refinance, you may be able to take out a loan that is good for at least 15 years at a fixed rate. This can provide you with some stability, but make sure you can make your decision as soon as possible, since the Federal Reserve is only going to keep mortgage interest rates low for the next two years.
Be a wise spender. Majority of those who are able to settle their debts, especially their home loans, have learned to manage their personal finances very well. They keep track of their budget and pay for those that are only necessary. The advice “Live within your means” has never been truer than these days.
Maintain a good credit score. The ideal credit score can sometimes vary from one lender to another, but the bottom line is if you can have at least 650 and above, you shouldn’t have any issue obtaining a new loan or even request for a lower interest rate. In fact, you don’t have to search for great offers. A lot of lenders may approach you.