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HOW TO "BUY TIME" AND LOWER YOUR MONTHLY PAYMENTSFor many people with financial difficulties, all that's needed is a little breathing space in order to resolve their problems. Typically, this breathing space must come from a larger creditor such as those who finance cars, boats, motor homes, or even your home mortgage. Frequently, just one month's relief from a car or mortgage payment can give you the time you need to catch your breath. Unknown to many, lending institutions that handle larger loans, such as motor vehicle or house mortgages, can offer a "skipped payment" arrangement. A skipped payment is a compromise where the lender agrees to accept a flat payment to cover interest and administrative fees in lieu of the full month's payment. In the case of a motor vehicle loan, it will usually be 25 percent of the normal monthly payment. The skipped payment agreement is generally allowed only one time during the life of a loan contract. If, after the skipped- payment agreement, you still cannot meet your obligation, you can attempt to renegotiate the terms of the loan. This will usually only work if you've made at least one year's worth of payments. You can attempt to lengthen the terms of the loan and thereby lower your monthly payments. At the same time, you can buy an extra month or two before you have to make another loan payment while the new terms are being negotiated. The bank or finance company usually will express great reluctance to allow a skipped payment, or to renegotiate the terms of the loan. If they do, threaten to return the vehicle. As we mentioned, they don't want the property returned. After much huffing and puffing, they will most likely compromise with you. A WORD OF CAUTION -- always be prepared to carry out your threat to return the merchandise. But remember that you can always back down as a last resort and follow your original loan terms. It's strictly a game of poker, and the stakes are really not that high. Mortgage negotiations are very complicated and are considered high stakes poker. Such negotiations will, in most cases, require an attorney by law anyway. |
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