Can’t Pay Your Mortgage? Here’s what to Do

Things happen. Your finances seem fine one minute and then the next you find yourself unable to pay your bills on time.

In a perfect world, you’d never worry about paying bills on time or having enough money in your bank account. Unfortunately, the world isn’t perfect and sometimes you can’t plan for things going wrong financially. If you can’t pay your mortgage, it’s normal to be scared.

You don’t want to lose your home and you don’t want to fall into a cycle of bad credit. It’s important you come up with an action plan for solving your financial situation as quickly as possible. Here’s what to do if you can’t pay your home loan payments.

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Talk to Your Lender

Your first step should be to talk directly with your lender. It’s scary sometimes to reach out to your lender when you know you can’t make a payment, but this is your first line of defense. Don’t delay before making that call! The sooner you speak to your home lender, the more options you’ll have.

Your lender wants to get paid. They’re more likely to work with you if you’re willing to call and try to work something out. When you call, you might have to discuss why you’re unable to pay at this time as well as when you expect to be able to pay. Many lenders are usually willing to find a temporary plan to ensure you keep your property.

Forbearance or Repayment Plan

If you’re only facing temporary financial problems, forbearance might be the right temporary solution. Forbearance means a temporary agreement for reducing or limiting your home repayment payments. After this period ends, you’ll be expected to catch up on these reduced payments. If you’ve already missed several payments, your lender might offer a repayment plan to pay back the entire amount you owe over a set period of time. Speak to your lender about these options and whether they’re an option for your situation.

Mortgage Refinancing

If you aren’t already reaching your financial limit but need a change to your loan repayment, refinancing might be the best choice for you. USDA refinance can help lower your overall monthly payments to help lower the stress on your finances. If your home loan is not in delinquency, you might even qualify for a lower interest rate which can save you money in the long run. Speak to a lender or mortgage specialist about whether refinancing is a good option for you.

Rent Your Home

Renting your home is a good way to lessen your financial burden. If you have another place you can stay, you can rent your entire home for a duration of time, thus earning money to pay towards your mortgage. Even if you can’t rent your entire home, you might be able to rent an extra room or area of the house to help pay your home loan payments. Home rental prices generally are higher than mortgage rates, so if you’re willing to navigate the rental process this might be a solid option.

Sell Your Home

While selling your home might not sound like the best option, sometimes it’s the only option. If you’re facing foreclosure, the best way to avoid this is through selling your home. Even if your mortgage is bigger than the market value of your home, you still have options like a short sale. Selling your home gives you the opportunity to escape the pressure of a mortgage payment. You might be able to move in with family or downsize to a smaller home.

Paying Your Mortgage

Nobody wants to find themselves in a financial situation where they can’t make their mortgage payments. Unfortunately, this is the reality many Americans find themselves in every day. To avoid foreclosure, take the steps above to find a solution. A lot of lenders are willing to work with borrowers who are proactive about repaying their home loan. Don’t lose hope! It’s possible to bounce back from this financial fall, and this doesn’t mean your credit is doomed forever as long as you create a plan.