How Can I Save My House If I Lost My Job?

You may have other debt in addition to your mortgage, such as car payments, credit card balances and student loans. You also have daily living expenses like food and utilities. With no money coming in, you'll have to make covering your living expenses your top priority. Use your savings or any other income sources to pay for the necessities first, including your mortgage payment, and put everything else on the back burner.

It's important to contact your lender as soon as you know you have a problem, preferably before missing a mortgage payment. The sooner you get in touch with your lender, the better chance you have of gaining help through various programs lenders offer to help customers who are in financial distress. Some lenders also offer counseling services that can help you assess your situation and explore the options that are available to you.

The federal government offers programs that can help homeowners who are having difficulty making their mortgage payments. These can be found at MakingHomeAffordable.gov. In particular, the Home Affordable Unemployment Program is designed to help people keep their homes in the event of a job loss. Depending on your situation, you may qualify for a reduction in your mortgage payments or to have your payments suspended for 12 months or longer.

If all other options fail and you still want to keep your home instead of selling, consider filing for bankruptcy protection. Through bankruptcy, some or all of your unsecured debt such as credit cards can be forgiven, and you may also be allowed to keep your home. By no longer having to pay your other creditors, you'll be able to devote more of your limited resources toward your mortgage payment. On the downside, you'll have a black mark on your credit for up to 10 years, which will affect your ability to obtain future credit once you're back on your feet.