Here’s What To Do If You Are Struggling To Pay Your Mortgage.

HERE’S WHAT TO DO

If You Are Struggling to Pay Your Mortgage

Are you struggling to pay off your mortgage? Most people especially now are behind on their payments because of the Covid-19, it is making people not just sick but lose their incomes due to shutdowns. If you are struggling to pay off your debts, more so your mortgage, here are some steps to avoid a foreclosure.

REACH OUT AND ASK FOR HELP

One thing you need to understand is that failing to pay your mortgage will damage your credit score, which is especially worse during a financial crisis. The lower your credit score will get, the more difficult it will be for you to borrow money in case of an emergency. In addition, failure to pay off your mortgage means you become too delinquent on your mortgage thus you will be exposed to the risk of getting foreclosed.

One you notice that you are struggling to pay off your mortgage, the first step for you to take is reach out to your mortgage lender right away and ask for leniency.

The best thing is that many mortgage lenders understand that circumstances happen and they are willing to help you through your financial hardships. In many cases, I have seen borrowers deferring on their mortgage payments for a number of months during a crisis and even though interest on the loans (may) still accrues, the payments will not be regarded as delinquent which means your lender will not report them to the credit bureaus.

When you call your mortgage lender, be ready to explain some few details including;

• Why you are unable to make payments. • Whether your situation is temporary or permanent. • Details about your income, expenses and any other assets you may be having, like cash in bank. • If you are a service member and have received permanent change of station (PCS) orders. (This is important to mention, because you may qualify for loss mitigation options because of your military move.)

GO FOR COUNSELING

You may opt for a HUD approved housing counselor who can; • Review your situation with you and determine whether you qualify for any programs or are in need of additional help. • Help you to get a better understanding of your loss mitigation options your services offers and the best options that will work the best for you. • Offer guidance through the process of

working with the servicers and/or any programs and paperwork that may be required. • Help you with your budgeting, credit card debt, financial management during this time all issues that can impact your mortgage payment.

You can use the CFPB’s “Find a Counselor” tool to get a list of housing counseling agencies in your area that are HUD-approved. You can also call the HOPE™ Hotline, open 24 hours a day, seven days a week, at (888) 995-HOPE (4673).

SO WHAT OPTIONS ARE AVAILABLE TO YOU?

There are a few options including; • Refinancing. • Loan modification. • Work out a repayment plan. • Get forbearance. • Short sell your home. • Give your home back to your lender through a “deed-in-lieu of foreclosure”

WHAT HAPPENS WHEN THE LENDER WON’T ACCEPT YOUR OFFER?

There are instances where the lender might not accept what you are offering them. In such a case, you should continue paying as much as you can. But, if you think the lender hasn’t handled your case well as they should have, discuss it again with them, but you can still make a formal complaint and the lender has up to five days to acknowledge your complaints.

If the lender threatens to take legal action, remember it is never too late to come into terms with the lender. Supposing you are facing a legal action for repossession, you might need help to negotiate, but you need to be prepared as this process can be extremely stressful. This is critical, and in such a case, you should proceed with caution because if you cannot make an arrangement with the lender, you could lose your home.

WORST CASE SCENARIO…

If you do not have enough money to continue paying off your mortgage, or any debt, you might decide selling the home but you should never do this without proper financial advice. While selling your home might seem a little extreme, sometimes it may be the best way out.