What Should I Do If I Can’t Pay My Mortgage?
You may be reading this because you can’t pay your mortgage on your house in Madison and are looking for some advice on what to do next. Let’s talk about it! If you’re considering walking away from your mortgage, keep in mind that the mortgage servicer may sue you to recover any deficiency balance left after the foreclosure process. This means they will be suing to get back whatever money is owed after all of the proceeds from the sale of your home go towards paying off your debt. The lawsuit could end up costing a great deal of money and even prevent you from buying another house in the future or getting an auto loan – not good!
So what should you do if you’re at risk of getting behind on your mortgage? Take these steps!
Contact The Bank To Make Arrangements For A Forbearance
A forbearance is an arrangement with the mortgage company where you agree to suspend payments temporarily, so you both have time to talk about a more permanent solution. Keep in mind forbearance agreements don’t come free! The forbearance agreement may include fees and interest charges during that forbearance period. Still, it can help you avoid foreclosure and prevent a negative impact on your credit report if the mortgage servicer is willing to work with you.
This is sometimes the best option to take, especially if it’s an option you didn’t know about! If forbearance works, it’s essentially putting off your monthly payments for a set time until you can catch up. Make sure you understand any forbearance agreement completely before accepting one, so you know what you are signing up to.
The best way to get a forbearance approved is to talk to the loan servicer about your financial hardship and present them with a realistic plan to bring your account current. Remember that forbearance is not forever, and if you’re still behind once your forbearance period ends, you’ll go right back to where you started!
Talk To Your Lender About A Loan Modification
A loan modification is an agreement in which you and your mortgage lender change the terms of your loan to lower your monthly mortgage payment by reducing your interest rate or extending the loan duration. There are several different types of loan modification plans that vary in their requirements, benefits, and length.
In order to get a loan modification started, you must contact the lender and submit a loan modification application with an explanation of your financial troubles. Your lender can tell you how much income documentation they require to start the process; banks vary widely regarding how flexible they are when it comes to paperwork!
Refinance With Another Mortgage Company
One option is to apply for a new mortgage with a completely different lender. This may allow you to lower your mortgage payments by taking advantage of a lower interest rate. Your payment may also be reduced by stretching out the remaining principal over thirty more years. Be sure to check with the lender to ensure that they will allow you to qualify for a lower interest rate before you move forward.
To apply for a new mortgage, you will need to sign a variety of paperwork. You will need proof of your income, proof of your assets, and in most cases, an appraisal of the current value of the home. The lender may also require documentation on how much is being spent paying off other loans or credit card debt every month.
This option will require additional fees when you close on the new loan. Make sure to talk with the new lender about what costs will be incurred.
Work Out A Repayment Plan With The Bank That You Can Afford
If you have already had some late payments, you will need to contact your bank about a repayment plan. This will involve making payment arrangements directly with your bank once you’ve met with a loan officer.
With a payment plan, you can expect payment amounts that are larger than you’re used to. However, this payment plan will help you avoid foreclosure and keep your home in the process.
Remember that it’s easier for a bank to modify payments for someone who is making them consistently every month rather than waiting until you are several months behind!
File Bankruptcy If Necessary
Filing bankruptcy is a drastic measure, but it may be the best option available if you have missed payments for some time. Here are some things that bankruptcy can do for you:
- It will stop the foreclosure process and give you a fresh start on your house.
- It will eliminate most of your debt, including credit cards and medical bills.
You must consider that a bankruptcy filing will stay on your credit report for up to ten years from the date filed unless otherwise noted.
If deciding to go this route, you must find an attorney specializing in bankruptcy that can give you the legal advice you need.
Sell Your Madison AL House And Buy A More Affordable Home
Sometimes the best option is to lower your expenses by downsizing. This will reduce your monthly housing costs and allow you to free up cash for other bills like utilities and food. Downsizing can also mean lower property taxes and lower utility costs.
When selling your home in Madison, it is crucial to consider the state of the real estate market in your area. If you plan to buy a less expensive home or move into a rental, it may be good to wait until prices drop. However, in markets that are improving, now is usually a good time to sell as prices have been increasing steadily.
Selling it in a hot market can be a double-edged sword, though. You can sell your house for a high price, but you also have to pay a premium on a new home. However, if you have some equity, that may be used to offset some other bills or debt.
What To Do If You’re Having Trouble With Your Mortgage Payment
If you are at risk of falling behind on your mortgage payments, it is vital to take action quickly. There are several options available for homeowners in this situation. You can try to get a forbearance from the bank, apply for a loan modification, sell the home and move into something more manageable, or refinance into an affordable monthly payment. The final option–filing bankruptcy–is generally not recommended because it will have long-term consequences that could affect your credit score and job prospects. It’s best to explore all other alternatives before resorting to such drastic measures.
We are local Madison house buyers, and we will buy your house before it goes to foreclosure. We’ve helped countless people with their mortgage payment problems and are confident we can help you. We’ll make you an offer to buy your house so you can move on and forget about a foreclosure.
What do you have to lose? Why not get an offer from us as you consider your options. Our offers are 100% FREE and have no obligation to accept!
Check Out How We Make Selling Your House As Simple As Possible!
