With the introduction of non-traditional loans with adjustable rates, shorter payment terms, and loans that allow 100% financing, the interest rates on home loans have dramatically increased. True, more people have acquired a home loan but unfortunately, many of them were not able to keep up with their monthly mortgage. The result? More and more people are facing home foreclosure.

The possibility of losing your home because of an unpaid mortgage loan is heartbreaking. After many months of striving to invest on a new home, now you are bound to lose your property after all. But this shouldn't have to be the end. Yes, there is an alternative which can be done to avoid foreclosure.

What You Can Do

If you haven't been able to make your monthly mortgage payment on time, call your lender right away and explain your situation. Of course, you should have a valid reason why you're not able to keep up with your payments. Uncontrolled spending and splurges are definitely not acceptable reasons.

However, if you're experiencing financial difficulties because you have been dismissed from your job, you have been sick for the past months, or a member of your family has a serious illness, if there has been death in the family, and other understandable reasons why a person may fail on paying his dues, don't hesitate to inform your lender right away.

Forbearance and Mortgage Modification

Request that a special forbearance be showed on your behalf. Asking for forbearance means certain adjustments will be done regarding your present payment terms. For instance, your lender may set your payment due date at a later time or you may also be given a reduced rate on your payments.

If you want, you may also request for a mortgage modification. A modification is just like refinancing your existing mortgage loan so you can avail of lower payment terms. However, with a mortgage modification, the borrower is not required to go through the re-application process.

These are typical provisions that lenders extend to their clients who are confronted with financial crisis like you. So don't think that you're the only one asking for forbearance or mortgage modification. Also, do not think that this is the first time that your lender will encounter such a request. Lending companies have encountered innumerable cases of foreclosure and that is why they have come up with repayment provisions.

It Pays Being Honest

The new repayment plans on your mortgage loan will depend on your lender and on your negotiation. Hence, it is important to be honest with your lender. Tell them what payment terms you can afford given your present situation.

You don't have to wait for months to pass by before meeting with your lender. Speak with your lender immediately as soon as you realize you won't be able to submit your monthly payment on time. Do not wait for your lender to contact you and ask why you've been missing your payments. By showing that you are willing to pay your dues and being honest about your situation, lenders will be more willing to make the necessary modifications to assist you.