What Should I Do If I Can’t Pay My Mortgage?

Times are tough all over these days. Families are struggling to make ends meet. The government says the hard times are behind us, but that doesn’t change the fact that many families continue to struggle.

Whether your financial hardships are long-term or temporary, during some months you must make hard decisions in order to keep food on the table. Keeping a roof over your head is a huge concern for families in this state of crisis, however, while you may feel very alone when it’s happening, there are options available.

Assess the Situation

The first thing to do is figure out whether this is a one or two-month, temporary crisis, or if it’ll be ongoing. Different options exist for you based on how long your financial crunch is going to last. Long-term unemployment, the sudden loss of a job, divorce, or unexpected disability all qualify as long-term financial issues.

Short-term, or temporary issues include things like unexpected car repairs, unexpected time off from work without pay, or even something as devastating as a death in the family. These are the types of things that affect your finances for a month or two but not for the duration of the loan. Knowing your predicament helps you make informed decisions about the next steps you must take.

Short Term Solutions for Inability to Pay Mortgage

Mortgage payments are due monthly, and going into the mortgage, most people understand that it’s a 15-30 year commitment. You set aside a little money each month for savings, but secretly hope hard times will never hit. When they do, it leaves you seriously cash strapped, especially when the event is a quickie emergency. You don’t want to get behind on your mortgage payments, and you understand what a slippery slope it is, however, it remains one of the options available to you when other avenues have been exhausted. The other options include:

  1. Work Out Payment Plan With Your Lender – Call your lender and see if you can make payment arrangements. No one, neither you nor the lender, benefits when foreclosures happen. It’s in the interest of the lender to work with you to keep things on track as much as it is in yours. However, you must communicate with them so that you can make satisfactory arrangements for both parties.
  2. Negotiate a Loan Modification – While different lenders may require up to three months’ worth of delinquent payments before you can choose loan modifications — and you must document your hardships in order to receive them, a loan modification can make the difference between saving your home or losing it.
  3. Defer Mortgage Payments – Some lenders will allow you to defer your mortgage payment for a specified period, and you’ll have to work with them to understand the specific conditions. Some require a double payment the following month; some require an additional portion of the payment for the next two, four, or six months, and others will defer the payment to the end of the loan with additional interest charges. It’s not the best choice, but it can be a game changer when you feel like you’re drowning in financial problems.

Long-Term Mortgage Solutions When You Can’t Pay

Long-term solutions are often more painful, but sometimes simpler. There are really only three available to you that could possibly have a favorable impact.

  1. Refinance Your Home –  (the home will have to be appraised again and you’ll have to pay closing costs and go through credit qualifications all over again)
  2. Short Sell Your Home -(lender must agree to this)
  3. Deed-in-Lieu of Foreclosure (the process relieves the borrower of the debt and saves the lender time, money, and resources required for a foreclosure).

If you get to a point where you feel your current house is just too much of a financial burden, and you’d simply like to put your real estate worries behind you, you can also contact a real estate solutions company such as Home Remedies, LLC .  Home Remedies, LLC is a client-oriented real estate company, and has been finding solutions for CT homeowners for the past 15 years.  We specialize in foreclosure avoidance, and all information you provide is strictly confidential.  The consultation and most of our services are free, so if you’d if you’d like to find the best real estate solution, in the fastest, easiest way possible, contact Home Remedies, LLC today, and let us find a cure for your home ownership blues.

About Author

Pat Funaro

Pat is the founding Member of Home Remedies, LLC, and for the past 18 years, has enjoyed helping Connecticut homeowners navigate the challenges of home-ownership. He earned an MBA at UConn, and is the Owner/Broker at North Atlantic Realty. LLC.

Related Posts