How can you ensure your home loan payments are made?

2014 has seen the introduction of new regulations that are intended to make lenders more responsible when providing home loans to applicants.  The intention is to prevent issues like those that happened during the last housing boom.

The Consumer Financial Protection Bureau (CFPB) rules came into being in January.  They state that mortgage providers must establish a customer’s ability to repay a loan in the long term not just in a period of reduced payments that may have previously been used to entice custom.

But even with these rules in place there may come a time when your circumstances change and you’re no longer able to meet your home loan repayments; what can you do to protect yourself for this situation if it occurs? See  Asset Lease Australia to learn more.

Mortgage Protections Insurance

This type of insurance is intended to protect your home payments should you experience ill-health or loss of your employment.  If you find yourself in either of these situations you’re unlikely to be able to keep up with your payments.

How much you’ll pay for this insurance is very much dependant on how old you are, how good your health is and what amount outstanding on your mortgage.  Like any other insurance policy the cost reflects the risk taken by the insurance provider in granting you the plan.

The benefit of mortgage protection insurance is that you’re guaranteed to be accepted.  It may seem like a lot of money to pay out when you don’t know if you’re ever going to need the cover.  But if you do ever experience difficulty at least you’ll have the relief of assistance if you’ve got insurance cover.

If I haven’t got cover what should I do if I can’t pay?

You might not have mortgage protection insurance, or your situation may not be covered by the plan; so what should you do if you can’t pay.  There’s plenty of advice available, from organizations such as the Financial Services Authority (FSA), on what action you should take if you’re having difficulty meeting your home loan payments.

The most important thing to remember is that you should be honest with the provider from the outset.  Don’t forget that they want money; they don’t particularly want your home, so it’s in their own best interest to negotiate payment arrangements with you.  If you don’t get in touch you risk getting yourself into deeper problems.

Make sure that you compile a personal budget so that you have the information to hand when negotiating.  Don’t underestimate your spending or the amount you can afford to pay as this may cause further problems down the line.  Remember to include all of the household spending and any other debts you’re paying.

If you’re unsure about contacting people yourself try locating a free advice agency in your area as they may be able to act on your behalf.  It’s far better to do this than to avoid the issue and risk encountering further difficulties.

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