Adding Payments to the End of the Loan

During financially difficult times, people can find it hard to make a mortgage payment. Whether it is a sickness or other medical emergency, a loss of employment, or any incident that can place an unusual drain on a person’s monthly income, one option that people have is to add any missed payments to the end of the mortgage loan.

People in this situation may find it appealing to find someone to take over subject of the loan. When a situation like this arises, it can be a great opportunity especially if there is a lot of equity in the home and the buyer needs you to catch up on the payments.

Be creative in closing the deal. Depending on the amount of equity, offer the buyer a period of time (or a certain dollar amount) of no payments and no interest. Work with them in adding the payments to the end of the loan to help move the deal along. But be sure you get the deed before doing this.

Loan companies will also issue a Notice of Default. This is a formal notice to a borrower declaring that a default has occurred and that legal action may be taken. You will want to get the forms filled out to have the payments added to the end of the loan prior to receiving the notice. If this does not happen, you will want to know your individual state laws before having the deed signed again or to have the deed signed the first time.

In the even that the deal goes as planned, be sure you are prepared to give the seller a rescission. A rescission is something that does away with an existing contract and returns the people involved to their situation prior to signing the agreement. So basically, a rescission refers to the cancellation of a contract. If there has been money paid from one person to the other, that money is to be returned. It can occur for many different reasons. Maybe because of representation (accidental or fraudulent), mutual error, failure to get adequate legal counsel, a misunderstanding of everything that was entailed in the contract, or pressure and unmerited coercion. Whatever the reason, it is something to keep in mind if things go wrong.

If you are new to this business, be sure you get wise counsel from an attorney, friend, or colleague that can give you the necessary guidance. Bad decisions can be very costly.

For additional information on real estate investing and the hot foreclosure market, I recommend joining Ron LeGrand's Millionaire Maker Newsletter The newsletter itself is loaded with great tips and resources, and he's usually giving away something free like a CD or something that generally has a lot of great information on it.