The Truth About Foreclosure
Foreclosure happens when a person fails to make payments whatever the reason may be on their mortgage. Foreclosure is what the lender, usually a bank or credit union, does to try to recoup some of their losses since payments haven't been made. The lender essentially takes back the home from the borrower.
Foreclosure is when the mortgage lender takes back ownership of the home you live in because you have defaulted on the loan. Default is a term that is usual to understand so you can make sure you never do it. If for any reason, you fail to make payments on time and in full according to the terms and conditions set forth in the mortgage, you are considered in default on the loan. When you default on the mortgage, you give power to the lien holder.
Lien holder is another term important to understand as it relates to foreclosure. The lender, usually a bank or credit union, gives you money to finance your purchase of the home. This means there is a lien on the home. In truth, the lien holder has the power to take back the home, or foreclose on it, if you don't keep your contractual obligations.
Acceleration is another term you will hear in association with foreclosure. When something accelerates, it speeds up. Acceleration is the term used to describe the action of speeding up your loan repayment. If you are failing to make payments on the mortgage, the lien holder can accelerate the terms of the loan and require the entire loan amount be paid back.
In order to do this, there must be an acceleration clause written into your mortgage. Most lenders won't issue mortgages these days without an acceleration clause because it protects them. If they didn't have the ability to accelerate the loan, they could only seek to reclaim the amount you have failed to pay.
Default is a term used in the previous paragraph. It is a term that is pretty self explanatory, but it is still important to know what it means. When someone fails to make payment on their mortgage as the terms and guidelines state on the mortgage, the loan is considered to be defaulted on. If you default on a loan, you have not kept your contractual obligations and the lender can move forward with reclaiming the property as the terms of the mortgage stipulate.
Foreclosure can seem messy. But knowing some of the basic terms will help you understand it better and understanding just might help you avoid it.
Foreclosure is when the mortgage lender takes back ownership of the home you live in because you have defaulted on the loan. Default is a term that is usual to understand so you can make sure you never do it. If for any reason, you fail to make payments on time and in full according to the terms and conditions set forth in the mortgage, you are considered in default on the loan. When you default on the mortgage, you give power to the lien holder.
Lien holder is another term important to understand as it relates to foreclosure. The lender, usually a bank or credit union, gives you money to finance your purchase of the home. This means there is a lien on the home. In truth, the lien holder has the power to take back the home, or foreclose on it, if you don't keep your contractual obligations.
Acceleration is another term you will hear in association with foreclosure. When something accelerates, it speeds up. Acceleration is the term used to describe the action of speeding up your loan repayment. If you are failing to make payments on the mortgage, the lien holder can accelerate the terms of the loan and require the entire loan amount be paid back.
In order to do this, there must be an acceleration clause written into your mortgage. Most lenders won't issue mortgages these days without an acceleration clause because it protects them. If they didn't have the ability to accelerate the loan, they could only seek to reclaim the amount you have failed to pay.
Default is a term used in the previous paragraph. It is a term that is pretty self explanatory, but it is still important to know what it means. When someone fails to make payment on their mortgage as the terms and guidelines state on the mortgage, the loan is considered to be defaulted on. If you default on a loan, you have not kept your contractual obligations and the lender can move forward with reclaiming the property as the terms of the mortgage stipulate.
Foreclosure can seem messy. But knowing some of the basic terms will help you understand it better and understanding just might help you avoid it.
posted by Debt Consolidation Loan at
11:09 PM
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