Many families are facing a tough situation. They are paying more for their mortgage than their homes are currently worth. Some of this is due to a plunge in home values, while in some cases it is due to increased borrowing against a home. Whichever the case, foreclosure isn’t necessarily the only option. With a little frugal knowledge, you can get back on track.
First of all, don’t panic. If you can still afford your payments each month and don’t need to sell your home, then you are still in okay shape. It is important to take stock of your individual situation. You can contact a home or credit counselor to see where you really stand.
Once you have taken stock and can confirm that you either can in fact make your payments or are close to being able to make your payments comfortably, then the next step is to do what you can to cut your expenses through frugal living. This way, you’ll be able to build up a cushion that can be used in emergencies or to apply toward your premium, thus putting you in a better position to pay down your mortgage or refinance it if needed.
There are many ways to cut expenses. The best way to do this is to look at needs versus wants. You need food, basic clothing and medical care. You don’t need food eaten out, fancy or the latest stylish clothing and botox. You can still build in some luxuries and just find new ways of paying less or nothing at all, such as going to the movies for taking them out for free at the library.
It is important to get the help you need when your mortgage is higher than what your home is worth. I mentioned counselors. Did you know that there are free and low cost programs out there that offer help with loan modification and other ways to avoid foreclosure and bankruptcy? One such program is the HOPE hotline at HopeNow.com.