Options For People Who Can’t Afford Their Mortgage
When the 2010’s rolled around, the number of foreclosures started to increase considerably. Thanks to the things like unemployment increase and economic downfall, many homeowners were not able to pay their mortgages.
If you are someone who is struggling to make your mortgage payments, you’ll be happy to know that there are a few options for you.
You may be eligible to refinance your loan if you’ve been good with paying on time up until now. Let’s say that you pulled out a ten-year loan. You could visit your lender and ask them to extend your loan, which would in turn stretch out your overall payment into smaller payments.
Do be aware that when you refinance, you might have incur some fees for doing so. If you want to find out if refinancing is even a good option for you, we recommend checking this guide out. Unfortunately, refinancing might not even be in the cards if you’ve already extended your loan past a certain point.
2. Set Up a Short Sale
If you don’t want to get foreclosed on, your best bet might be to sell your house. You just have to find the right way to list it. In many cases, a person’s mortgage might trump the value of their house, meaning they won’t have the option to put their house up on the market in the traditional sense. In this case, a short sale is the best option.
Short sales are when a lender allows a homeowner to sell their house for a lesser value than the mortgage. The disadvantage to this is that is that it is completely up to the lender. It can also put a big dent in your credit, though not as big a dent as foreclosure.
3. Turn In a Loan Modification Application
A homeowner has the option to sit down with their lender and try to work out a loan modification plan if they cannot afford their mortgage. A loan modification could entail a number of things, such as a change to the overall term or mortgage rate, as well as a difference in the monthly payments. As you may have guessed, loan modifications are sort of like refinancing.
With that said, one of the requirements of a loan modification is that you need to prove your financial hardship to your lender.
If All Else Fails…
Take your keys off the chain and leave your home. Sometimes sending a bit of jingle mail to your lender is the best way to go. Many aren’t able to figure things out and that’s okay. It’s happened to millions of people. You’re not alone. Instead of trying to hold onto something that is sucking the life out of you, it is sometimes best to just let go.
We hope that our article has given you some ideas on how to go about your expensive mortgage payments. Have you or someone you know been close to foreclosure and figured a way around it? Feel free to share your story in the comments!