If you’re struggling to make your mortgage payments, you’re not alone. As many as one in five homeowners are behind on their payments. What happens if I can’t afford my mortgage and what should I do?
Here are several tips:
Talk to Your Lender
If you’re having trouble making your mortgage payments, the first thing you should do is contact your lender. They may be able to work out a payment plan or modify your loan so that it’s more affordable.
Get Help from a Housing Counselor
Many organizations offer free or low-cost housing counseling. A counselor can help you figure out your options and negotiate with your lender.
Refinance Your Mortgage Loan
If you have good credit, you may be able to refinance your mortgage loan at a lower interest rate. This will lower your monthly payments and make it easier to afford your mortgage.
Sell Your Home
If you’re truly unable to afford your mortgage, you may have to sell your home. This is often the last resort, especially for seniors who have spent their lives in the family home. However, it may be the only way to avoid foreclosure.
File for Bankruptcy
If you’re struggling to make your mortgage payments, you may be wondering if bankruptcy is a good option for you. The truth is that filing for bankruptcy can help you keep your home.
Bankruptcy Can Stop a Foreclosure Action
If you’re behind on your mortgage payments, the last thing you want is to lose your home to foreclosure. Fortunately, filing for bankruptcy can put a stop to a foreclosure action. When you file for bankruptcy, an automatic stay goes into effect. This means that all collection actions against you must stop, including a foreclosure. The automatic stay will give you some much-needed breathing room to catch up on your mortgage payments.
Bankruptcy Can Help You Get Caught Up on Your Mortgage Payments
If you’re behind on your mortgage payments, bankruptcy can help you get caught up. When you file for Chapter 13 bankruptcy, you’ll propose a repayment plan to the bankruptcy court. This repayment plan will include your past-due mortgage payments. As long as you make your regular mortgage payments on time, you’ll be able to catch up on your past-due payments over the life of the repayment plan, which is usually three to five years.
If you’re struggling to make your mortgage payments, don’t despair. There are several things you can do to stay in your home. Talk to your lender, get housing counseling, rent out part of your home, refinance your loan, or sell your home. With a little bit of effort, you can keep your home and avoid foreclosure.