Your mortgage lender probably doesn’t want to foreclose on your property any more than you want to face the dreadful prospect of foreclosure. The time to do something, though, is before things go too far. Once the lender starts the foreclosure process, lots of other fees and legal costs get added to your delinquent loan payments. Before you know it, you're in over your head. There is a chance that you can save your home as long as you take action before your financial woes get you into deeper trouble.
Call the lender or mortgage company that services your loan. If being short on cash is only temporary, the lender may be willing to help you out for a time. Ask if you can make up missed payments with a repayment plan. Once you resume making your regular monthly payments, your lender may allow you to pay additional money on the delinquent amount owed until you’re caught up.
Refinance your mortgage loan. If you get a lender to refinance your loan at a lower interest rate or for a longer term, the lower monthly payments could be enough to bail you out. In a case where you owe more on the mortgage balance than your home is currently worth, ask your lender if it participates in the Home Affordable Refinance Program, also known as HARP. You must look into the program before you get behind in your mortgage payments.
Find out more about other government programs available to help you if you’re close to losing your home. Ask your lender about government-sponsored loan modification programs to lower your monthly mortgage payments and make them more affordable. This could be the way to go given that Home Affordable Modification Program assistance decreases monthly mortgage payments by an average of 40 percent, according to the U.S. Department of Housing and Urban Development.
Talk to your lender about the Home Affordable Unemployment Program. You may qualify for this assistance if you're unemployed and eligible to receive unemployment benefits. Your lender may be willing to temporarily reduce your mortgage payments or suspend them for 12 months or more to help you out while you look for a new job.
Consider selling your house. If things seem like they’re not going to improve for a while, selling the property for enough to pay off your mortgage might not be a bad idea. Your may even be able to talk your lender into taking less than the remaining balance you owe on your mortgage loan if you can prove that your situation is really bad.
Amber Keefer has more than 25 years of experience working in the fields of human services and health care administration. Writing professionally since 1997, she has written articles covering business and finance, health, fitness, parenting and senior living issues for both print and online publications. Keefer holds a B.A. from Bloomsburg University of Pennsylvania and an M.B.A. in health care management from Baker College.