Forclosure
What happens if I cannot pay my mortgage?
If you can't make your payments, I'm assuming you've already talked to a family member or a friend, and you've tried to get another job to support the mortgage payment. If nothing has come of that, you need to find your local realtor and get the property sold. This is because what you don't want to have happen is for you to stop making your payments for three or four months, and the bank to foreclose on your property. So, if you have equity in your property, you are going to lose your home, your equity, and you'll have nothing to show for it.
Do I have a grace period to pay my mortgage loan?
You bet you have a grace period in which to pay your mortgage loan. The banks are not in the business to foreclose on properties. They're going to do everything they can to help you make your mortgage payments, or maybe they'll even take what's called a "short sale". Maybe they'll take a reduction just to help you out as much as possible. By all means, the bank will do whatever they can to help you out.
What is "default"?
Default means you are just defaulting on your mortgage, and you can't make the payments. So you need to get in touch with that servicer, who is servicing your loan, and explain to them the situation of why you are defaulting. It could be medical-related or you could have just lost your job, so they'll even try to put you on some type of payment plan. But it really depends on the servicer of your loan as to how lenient they are when you default.
What is "foreclosure"?
Foreclosure is where the bank is going to come in and take over your home. They're not in the business to do so and they give you a lot of opportunities to help you get out of the default situation that you're currently in.
If I am facing foreclosure, can I negotiate with the bank or refinance my home for a lower payment?
Yes, you can negotiate with the bank or refinance your home for a lower payment if you are facing foreclosure. First of all, it depends on who is servicing your loan. Regarding negotiating, each lending institution is completely different. As far as refinancing goes, it depends on how many payments that you're late on, because you might not be able to get a home loan once you're technically in default.
