Unless you have your head in the sand, you are aware of the foreclosure crisis. More families are losing their homes than ever before. If you are nervous about your mortgage situation, there are some “do it yourself” solutions to consider.
Your mortgage is the most important loan you have. It enables you to keep a roof over your head. You should pay your mortgage first if you don’t have enough money to go around for all your bills. The problem that often leads to foreclosure is the inability to pay that large payment each month.
The first step to improving your situation is to look hard at your budget. Often as our financial problems accumulate, we begin to ignore them. If this sounds like you… either stop now and get in gear, or get help from a counselor. Don’t end up another foreclosure statistic.
If you truly can’t make that mortgage payment, after evaluating your budget… there are a couple of options.
1. Refinancing is an option if your mortgage has a high interest rate or adjustable rate. Get that loan into a fixed amount, so you can get a better handle on budgeting for it.
2. Too little income to pay a mortgage is often a result of a job loss or change in financial situation. If other bills are too high and it prevents you from paying your mortgage – get on the phone with those other creditors and negotiate. Most likely, they would want to help you get back on track then to lose you to bankruptcy. Find a payment plan you can work with and ask for it.
3. Find a way to make some extra money. If you can, look for freelance work, sell some of your stuff, or take on an extra part time job. If you can’t cut your expenses, you will need more money coming in.
4. Lastly, consider selling your home. Don’t wait too long for this option. In this market, homes are taking a lot longer to sell. If you truly can’t make your mortgage payments and none of these other options are feasible – get that house on the market now. Price it right too – you are not trying to make money now; you are trying to prevent a foreclosure.
5. If you have done everything above, and are still in trouble — get in touch with a realtor who specializes in foreclosures. He or she can help you negotiate a short sale with your mortgage bank. That way you can sell your house quickly and not lose all your equity.
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