When you’re behind on your mortgage payments, you risk losing your home to foreclosure. The quicker you take action, the better your odds will be for a favorable outcome. Here’s what you can do if you’ve missed mortgage payments:
Take the initiative
If it hasn’t happened already, don’t wait until your mortgage lender begins contacting you with letters and phone calls. It’s best if you can take the initiative and reach out to them first. Whether or not you’re initiating contact or responding to them, it’s important to explain the situation. For example, if you are behind because of a job loss or a sudden medical emergency, tell them. They may listen with a sympathetic ear, and you may be able to work out a new mortgage re-payment plan that can help you catch up. Ignoring them will usually make the situation worse; for each day you procrastinate, you’re that much closer to potentially losing your home.
If you didn’t permanently lose your job, but your income has been temporarily reduced (for instance, you were in an accident and had to take time off), forbearance may be a good option to consider. With forbearance, your mortgage payments would either be suspended or reduced for a certain time period; this is something both you and your lender agree upon. Once you’re back at work, you pay back everything you owe until your loan is current, while also resuming regular mortgage payments.
With your lender’s approval, you may be able to modify your loan so that the terms make it more affordable. Loan modification can include lowering the interest rate, or even reducing the total amount that is owed.
Reach out to a housing counseling agency that is back by the U.S. Department of Housing and Urban Development (HUD). These nonprofit organizations help homeowners in financial distress who have fallen behind on mortgage payments by going over viable options, helping to find programs they may qualify for (such as the Making Home Affordable Modification Program (HAMP), and providing guidance on how to proceed.
Watch out for scams
You may be contacted by third parties offering to help get you out of your financial jam and save your home. Often, these are organizations that seek out vulnerable homeowners and promise to save their home from foreclosure if they just pay a hefty fee. Other organizations may offer to give you the money you need to catch up on your mortgage payments and save your home from foreclosure, but by doing so, you may unknowingly sign your home away. The mortgage payments you begin making are no longer on a home you own, and you are basically unknowingly turned into a renter.
Sell your home
If all else fails and you are unable to hang on to your home, you can explore other options that can help you to avoid losing it through foreclosure, since foreclosure can ruin your credit. Depending on how far behind you are and what you’ve worked out with your lender, you may be able to sell your home normally, or you might be able to list it as a short sale. You may also want to opt for a deed in lieu of foreclosure, which is less damaging to your credit than a traditional foreclosure.
Contact Peachtree Financial Solutions
If you are behind on mortgage payments and the money you’re receiving from your structured settlement just isn’t enough to help you catch up, Peachtree Financial Solutions may be able to help. At Peachtree, we purchase future payments from people who prefer to receive their money upfront, whether to make a large purchase or take care of a financial crisis. If you’re at risk of potentially losing your home, there is no better time than now to contact Peachtree Financial Solutions about accessing your money sooner. We will be happy to answer any questions you may have about the process, and we can offer you a completely free quote.
Nothing above is meant to provide financial or tax advice. You should meet with appropriate professionals for such services.