Nobody wants to be behind on their mortgage payments. Something unfortunate must come up such as a loss of income, emergency situations, or some terrible financial issue. Some mortgages are not set up as a fixed rate and once the rate adjusts, the payments become more than what you could afford. If you’ve unfortunately fallen behind on your mortgage payment, here are a few steps to take to save your home.
1. Keep Your Lender in the Loop
The first thing you want to do, no matter the outcome, is to keep your lender in the loop the moment you know you are in this situation. Your lender will notify you via mail, email, or call you once you are behind. Do not dodge their communication. In fact, being proactive and reaching out to them will let your lender know you want to uphold your end of the contract.
2. Go Over Options With Your Lender
Now that you are in contact with your lender, you need to consider all options. Many times people will tell their lender that they will get the money in just to buy themselves some time. Let’s not drag this situation out. Find out now what options are available to you that they can offer. There may be a mortgage assistance program available, and they can email you over the application right away. Loss mitigation is a type of loan modification available for a variety of circumstances.
Your lender could work out a reinstatement to pay the past due amount and any additional fees involved by a particular due date. If you don’t have the past due amount, reach out to family or friends for assistance. However, another option is to see about taking out a personal loan. Maybe you can work more hours to make those payments, but it could get you right back where you need to be.
There is also the option of applying for and securing a bad credit mortgage. This option is ideal for homeowners who have a poor credit history.
Finally, your lender could work out a repayment plan with you. They would split up the past due balance and fees and add that to your regular monthly payment amount. You’ll work out an arrangement regarding the time you can pay it off.
3. Speak With a Counselor With a Housing Counseling Agency
You also should speak with a counselor at a housing counseling agency. These experts work with homeowners in your situation every day. They’ll need to know your exact circumstances to determine the best programs for you.
Do not be ashamed or feel like they are violating your space. They need to understand your financial situation up front to best assist you. These counselors can help you with other avenues as well, such as credit card debt, other outstanding loans, and daily living expenses. These counselors usually can provide their services for free as they are a part of city and statewide programs.
Finally, if all of the above options fail, you may need to sell your home. It’s a hard approach, but if your mortgage is not upside down and you can pay off your loan from the sell, this can save your credit rating.
