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Wells Fargo has provided a third alternative to homeowners who have fallen behind their payments: the loan Repayment Plan. With the Repayment Plan homeowners do not have to apply for a mortgage refinance or a loan modification and the credit implications that may have. It also allows homeowners to avoid some of the costs linked with a loan modification. For example, extending the term of a mortgage to reduce your monthly payments will increase the overall cost of your mortgage because you will take longer to repay the same balance and interest payments increase with time. Of course, a Repayment Plan is not for everyone. However, if you are behind in your payments due to a temporary hardship, such as losing your job, a repayment plan can help you to repay pay back when your financial situation improves.
What does it do?
A Wells Fargo Repayment Plan allows you to pay back your overdue amount over several monthly payments. Let us say your fell $5,000 in your mortgage payments because you were not able to work during six months because you suffered an accident. You are now starting to recover and expect to be back to normal in a couple of months. A Repayment Plan would allow you to pay back the $5,000 in portions over future months, say $100 extra every month over the next 50 weeks. Obviously, this plan will only help if your situation has or is likely to change in the future. If for the foreseeable future you will not be able to afford your mortgage payments, you will need to look at other options such as a loan modification, a short sale or a deed in lieu of foreclosure.
Let us review. A Repayment Plan spreads the total amount you are behind in your payments over a certain amount of months. During that period your overdue amount is divided among the number of months in the Plan and you pay a portion of it every month as well as your regular mortgage payments. If you are regular with your payments, your will be up to date with your mortgage by the end of the plan and your mortgage payments will drop to their normal level.
Wells Fargo determines who qualifies for this program based on your financial information and your personal account. If you are overdue on payments but now can afford your mortgage payments, you may qualify for a Repayment Plan. The length of a Repayment Plan will depend on how much you owe and how much you can afford to pay extra every month. Click here to apply for a Wells Fargo Repayment Plan.
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