If you miss the payments on your mortgage, then you would need to still pay back later together with penalties. This simply means your mortgage can never go unpaid. If you are still insolvent after the lender tells you to pay your past due amounts plus penalties, then the lender may be forced to introduce foreclosure. However, a repayment plan will make it possible for you to repay part of the delinquency monthly, together with your regular monthly installment.
LOAN REPAYMENT PLAN ELIGIBILITY
To be eligible for the loan repayment plan for the delinquency, you may be required to be financially stable. This simply means the financial issue that caused your insolvency must have been stabilized substantially. For example, you may be unable to pay up because you lost your job, but finally get a new and better job. In this kind of condition, the solution to impede foreclosure is to go for a loan repayment plan.
TYPES OF REPAYMENT PLANS
• • STEP-UP REPAYMENT PLAN: - In this type of repayment plan, the repayment is linked to the growth in income of the borrower directly. This makes it possible for bigger loan to be availed by the borrower. In this, people pay lower EMIs in initial years. This plan is best for people that buy houses at young age.
• STEP-DOWN REPAYMENT PLAN: - This type of repayment plan is the exact opposite of the above-listed. In this, people pay higher EMIs in initial year, which reduces gradually as time goes on. This plan is best for people that buy house at old age.
• FIXED AND FLEXIBLE INSTALLMENT PLAN: - In this type of repayment plan, the EMI would be fixed for some particular time, and later starts changing based on the market rate. During the period when the EMI is fixed, the market rate has no account and does not determine anything. This type of plan is best for parents that are interested in purchasing houses for their children.
• TRANCHE-BASED REPAYMENT PLAN: - In this type of repayment plan, the borrower pays interest based on the current level of construction of the property. This continues to change until the project is finally completed. In this, the borrowers have the means to save interest by fixing an amount based on the capability of what they can pay in installments to the bank.
• ACCELERATED REPAYMENT PLAN: - In this type of repayment plan, borrowers can choose to escalate the EMI when there is sufficient money or whenever the disposable income also escalates.
• BALLOON REPAYMENT PLAN: In this type of repayment plan, the installment amount tends to balloon as the loan term is approaching the last years. This plan is a little bit synonymous to the step up option.