What should you do if you cannot pay your mortgage?

What should you do if you cannot pay your mortgage?

| Mar 2, 2021 | Firm News

A change in circumstances, such as a job loss, may make it difficult to make your monthly mortgage payments. This is a situation that requires immediate attention. If you go too long without making payments, your lender could foreclose your mortgage, causing you to lose your home.

There are options available to you to help you avoid foreclosure. The Consumer Financial Protection Bureau suggests some steps you should take if you fall behind on mortgage payments.

Prepare to explain your situation

In many instances, your lender may be able to offer help, but you have to be able to explain how and why you started falling behind on mortgage payments. For this, you will need detailed information about your assets, income and expenses. You should also be able to explain whether the circumstances that caused the difficulty are permanent or temporary.

Contact your lender

It is not in your lender’s interest to foreclose on your mortgage. Therefore, if you contact your lender as soon as possible when you first start having difficulties, your lender may be able to offer you help to make up payments. The following options to save your home may be available to you:

  • Forbearance
  • Repayment plan
  • Loan modification
  • Refinancing

The availability of these options may depend on factors such as your credit score or payment history. Therefore, contacting your lender as soon as possible is important to preserve your eligibility for programs such as these.

If foreclosure is imminent, filing for bankruptcy may be another option. The automatic stay puts a hold on foreclosure activities in the short term and may buy you some time to make up mortgage payments.