You purchased a home in an affluent neighborhood and everything was smooth sailing for you for the past couple years. Then, your employer decided to downsize and you were one of the individuals who was let go. Now, you cannot afford your mortgage payments, are struggling to find a job, and are scared that you are going to lose everything that you worked so hard to obtain. What do you do? The steps below will provide you with some insight concerning viable options.
Loan Modification
The most important thing that you can do is contact your lender as soon as possible. Avoiding the inevitable will only make the problem grow larger and if too much time passes, your home may be in danger of going through foreclosure if you have fallen behind on several mortgage payments.
Your lender will work with you if you are honest about your current predicament and demonstrate that you are willing to get caught up on payments when you can. If you qualify for a loan modification, your monthly payments will be temporarily or permanently reduced. As a result, you can use any money that you have saved to get caught up on your mortgage payments until you are able to find a new job.
Forbearance And Reinstatement
If a loan modification isn't something that you would like to pursue because you haven't saved any money and do not know long it may take you to find a new job, then a forbearance and reinstatement might be the option to go with. A forbearance will grant you a temporary reprieve in which you will not be required to make any payments.
During this time, interest accrued will be added to the principle and you will not need to pay anything until you have regained your footing and are earning enough money to handle monthly payments. When your mortgage loan is going to be reinstated, you will likely need to make your normal monthly payment plus an additional fee until you have caught up your loan payments.
Assistance From A Government Program
If you cannot work out a reasonable agreement with your lender or are not fond of the options listed above, contact your local government to find out about programs that help individuals who have fallen behind on their mortgage payments. If you can prove that you used to make your mortgage payments on time and that you are doing your best to find a new job, you may qualify for a grant that will cover the costs associated with what you owe.
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