When you get a home loan, it is important to keep in mind how expensive a default on monthly payments can be. Your default makes you liable to pay fees and adversely affects your credit score.
The lender categorizes your loan as a non-performing one, i.e. a risky one. You then become liable to pay default-related fees and these are based on default rates which can prove to be a financial burden for you.
We at Home Loan Comparison co encourage clients to be proactive with gaining a better understanding of what these fees are. This helps them take the necessary steps to ensure there is no default on their mortgage payments.
The What And How Of Default-Related-Fees
As mentioned earlier, these fees come into play when you default on your loan repayments. They depend on:
- Type of loan
- Period of default
- Property size, its location,and condition
- State and local guidelines
- Investor and insurance guidelines
Once you are in default, it is best that you to contact the lender and explore your repayment options. If you are unsure about the process to follow, feel free to contact the experts at Home Loan Comparison co for guidance.
Be Prepared For A Property Inspection
The lender will want to make sure that you are occupying and maintaining the property and will send an inspector to inspect your home. Their jobs are to conduct a visual inspection, take pictures of your home and make note of damages if any.
You will be charged for property preservation if the house isn’t maintained or if it is abandoned. The lender has the right to secure the home if you aren’t living in your home when in default. You retain the right to live in the house during foreclosure, up until the time of sale. If you find that your property is incorrectly being treated as vacant, engage an attorney and inform the lender about your occupancy.
What Is Property Preservation?
Property preservation comes in force if you are not living in the house or it isn’t maintained as per the rules. The lender will take over the responsibility of maintaining it in good condition. These properties need to be maintained well for the twin reasons of safety and saleability in case of a foreclosure auction. Property preservation includes:
- Repairing broken windows and doors
- Replacing locks to improve safety levels
- Care of outbuilding and pools
- Maintenance of lawns
Costs Of Foreclosure
If monthly payment default continues, the lender will start the foreclosure process of your home loan. The foreclosure fees are as follows:
- Title search fees
- Attorney fees
- Mailing fees
- Deficiency Judgments
If you want to know more, don’t hesitate to contact us at Home Loan Comparison co on 0419 856 669.