A cause of nightmares for homeowners is eviction. Why? Well an answer to that is that many homeowners are concerned that they will not be able to make the mortgage payments on time. You ask how to avoid such a situation. Read on to know more.

The primary reason for choosing a standard 30-year mortgage is the lower monthly payment. The major point against this is that you will wait over twice as long to build the same amount of equity than if you had chosen a 15-year loan. Yes, the monthly payments will be slightly higher with a shorter loan, but if you can at all afford the higher payments, it will be far more worth it in the long run. As an example:

You are applying for a $200,000 mortgage. The available terms are 30 years at 6.5% interest or 15 years at 5.9% interest. The 30-year payment will be about $1,250, while the 15-year payment will be about $1,650. This is $400 more per month, however, during the 30-year mortgage you will be paying a total of over a quarter of a million dollars! You can save, over time, almost $150,000 by choosing the 15-year loan and toughing it out with the higher payment for a while.

One condition is that the homeowner declares all of his property and earnings; this is absolutely integral for qualifying for the program and also for up grading the loan terms later. The second condition that has to be fulfilled is that the reason for delaying mortgage payments must be genuine and unintentional. Lastly the owner should have covered at least 31% of the loan payments within the gross income.

These numbers are being used here strictly as an example; you should consult your financial planner or mortgage broker to have them look into your individual situation and determine which mortgage rates and terms are best suited for your particular situation.

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