Tips if you are behind on your payments

Ok, so in the crazy world today, there are so many people hurting. They are living in fear that one day, they will lose their home. Is this you? Here are some tips to help you get through this…

1. Be honest to yourself. Dont try to hide that this is happening to you. Its ok! Its happening to so many people out there. Possibly people you know. A neightbor, a friend, a family member. Do be too hard on yourself. Just tell yourself that you will get this figured out.

2. Dont ignore the phone calls from your lender. Honestly, the dont want to take your home from you. They want to work it out. They should be the first call you make when you are in this situation. Here are some of your options to get familiar with and to discuss with your lender.

If Your Problem Is Temporary – Call Your Lender

Reinstatement: Your lender is always willing to discuss accepting the total amount owed to them in a lump sum by a specific date. They will often combine this option with a Forbearance.

Forbearance: Your lender may allow you to reduce or suspend payments for a short period of time after which another option must be agreed upon to bring your loan current. A forbearance option is often combined with a Reinstatement when you know you will have enough money to bring the account current at a specific time in the future. The money might come from a hiring bonus, investment, insurance settlement, or a tax refund.

Repayment Plan: You may be able to get an agreement to resume making your regular monthly payments, in addition to a portion of the past due payments each month until you are caught up.
If it appears that your situation is long-term or will permanently affect your ability to bring your account current:

Mortgage Modification: If you can make the payments on your loan, but you do not have enough money to bring your account current or you cannot afford the total amount of your current payment, your lender may be able to change one or more terms of your original loan to make the payments more affordable. Your loan could be permanently changed in one or more of the following ways:

Adding the missed payments to the existing loan balance.

Changing the interest rate, including making an adjustable rate into a fixed rate.

Extending the number of years you have to repay.

Claim Advance: If your mortgage is insured, you may qualify for an interest-free loan from your mortgage guarantor to bring your account current. The repayment of this loan may be delayed for several years.

If Keeping Your Home Is Not An Option — Call Your Lender

Sale: If you can no longer afford your home, your lender will usually agree to give you a specific amount of time to find a purchaser and pay off the total amount owed. You will be expected to obtain the services of a real estate professional who can aggressively market the property.

Pre-Foreclosure Sale or Short Payoff: If the property’s sales value is not enough to pay the loan in full, your lender may be able to accept less than the full amount owed. This option can also include a period of time to allow your real estate agent to market the property and find a qualified buyer. Monetary help may also be available to pay other lien holders and/or help toward paying a few moving costs.

Assumption: A qualified buyer may be allowed to assume your mortgage, even if your original loan documents state that it is non-assumable.

Deed-in-lieu: Your lender may agree to allow you to voluntarily “give back” your property and forgive the debt. Although this option sounds like the easiest way out for you, generally, you must attempt to sell the home for its fair market value for at least 90 days before the lender will consider this option. Also, this option may not be available if you have other liens such as judgments of other creditors, second mortgages, and IRS or State Tax liens.

If you have trouble. Call a housing counselor. They can help mitigate between you and your lender.

17 year real estate industry veteran. Broker Associate at BRIX Real Estate. Real estate speaker, trainer, and strategist.

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