Mortgage Forgiveness means the lender forgives some or all of the debt you owe. That is, it merely wipes away that portion of your debt. One way this happens is by a loan modification program — that is, you negotiate new terms of your initial loan. You might get a lower payment in exchange for a more extended payout period.
Another way of debt forgiveness is foreclosure when the lender seizes the home that stands as collateral in the mortgage for non-payment.
Getting Mortgage Forgiveness
Usually, lenders offer two types of mortgage forgiveness plans. In one, you live in your home under revised terms. In the other, you move out but avoid foreclosure.
Whichever mortgage debt forgiveness you choose, know that there might be tax implications, which means that you might have to add whatever amount was forgiven to your gross income.
What if your credit history is low?
If your credit score is low, the majority of the banks will decline your application, believing that you are someone who doesn’t pay off debt. But a financial institution that deals with people who have bad credit scores will most probably offer you a mortgage but at a high mortgage rate.
In case your credit history is bad, it doesn’t mean that it cannot be fixed. By paying a more significant down payment, you can make a lender more comfortable with the idea of granting a mortgage. Other than that, being persistent about paying off your bills and debts will go a long way to improving your credit score in the future.
Improving Credit
One of the essential things that a bank looks at before giving a mortgage is the prospective borrower’s credit history. By analyzing an applicant’s credit score, lenders consider a person’s capacity to repay a loan.
Second Home
You might feel that buying a house, applying for a mortgage, and going through settlement for your second home buy is simple as you’ve done it all before. But considering you already own one house, there might be some additional procedures to consider when buying your next property. You can be looking to upsize, or downsize, relocate to another area or buy a vacation home. We’re here to help you through the journey of buying your next home.
Our guide to buying your next home
The process of buying your second home is not only an overwhelming phase in your life but also a time that can be filled with tough decisions that need to be made. Mortgage24 will help you in breaking down the jargon and help you with buying your next home with ease.
Check some of the tips on succeeding when buying and selling your next home.
If you don’t have additional cash to spend in your new house, the best option is to sell your existing property, thereby securing enough funds for your new home.
The other option is to purchase your next home first, should your existing home not sell for the price you want or by the date of your purchase.
Get in touch, and we can help you find the best option for your unique situation.