Mortgage Payment Behind
By mortgage writer: Dave Leonhart

Are you behind in your mortgage payments? Well, if this is the case, then this article is written just for you.

As you may or may not know, I’ve been in the mortgage business for over 20 years now, and when I wrote my first loan (in 1980.. yikes!) it was someone who was behind on their mortgage. But in those days, there were only hard-money lenders (private investors) who would lend you small amounts with big interest rates!

But times have changed, fortunately, and I am here to say for the better if you’re in this type of situation. There’s an excellent resource on the internet today RatesIQ.com which lists many top lenders who specialize in this area and they also post their rates, so if you search for this type of loan, you should be able to locate someone.

But, let’s not get ahead of ourselves. Let me explain the good, bad and the ugly regarding this unique loan situation.

Let me spell it out for you directly: You cannot always get a loan if you are behind on your mortgage., and that’s just the reality of it. There are many factors a lender must consider when lending someone money, and the single most important factor is whether or not you are making the mortgage payments on time! If you’re not, then you’re at a disadvantage, and this limits the types of loans that are available to you.

However, that’s the bad news. The good news is that there are some loans available to you if you’re behind on your mortgage.

The single most important criteria is the equity in your home. Why? Because if you are behind in your mortgage payment, you will need to have some equity for the lender to grant you a new loan. That is what they call a cushion, or padding. It’s a protection for the lender that if you get behind again, and stop making payments to them completely, they will have enough available equity to bail you out, and sell the house with enough left over to pay them off, plus all the costs to sell your home such as, real estate commissions, fix up cost, etc.

Of course if you wee to get behind on your mortgage loan, you could simply sell the house yourself and payoff the lender, but lenders have a tendency to look at a worse-case scenario, which to them means, getting the house back in foreclosure and needing to sell the home to recover their funds.

So how much equity does a lender need in order to grant yu a loan if you’re behind on your mortgage? Well, that depends on the lender, but 85% is about the maximum any lender will go, and that depends on how long you have been behind, and whether you are currently behind, or just simply making late payments.

To calculate your equity, you can use the nifty mortgage calculators located here, or just whip our your calculator and do the following:

Add up all your mortgage balances (1st, 2nd, & 3rd, etc.) you have on the property, plus any back payments that are due. Then divide that amount by the home’s value.

Make sure to use a conservative value because lenders do not want to over-value the appraisal when considering this type of loan. If the number you get is less than 85%, or preferably, less than 75%, you’re in business!

Here’s an example:

Suggestion #1
To locate lenders who do this type of loan, check out the excellent resources at RatesIQ.com and search for “Behind on Mortgage” loans.

Suggestion #2:
Some homeowners want to locate someone, anyone, who will simply take over the payments of the loan because the homeowner financial situation has changed and no longer fees they can make the payments. If this is your situation, there are a few companies who will actually take over mortgage payments and make up any behind payments, including late fees, etc., and continue to make your payments for you. However, you generally must have plenty of equity for them to this since they are taking a big risk by doing this.

This is a highly specialized area so surf around and see what you can find, or checkout the web site I indicated above at RatesIQ.com to see if any lenders offer this type of service.