Making a mortgage payment when you are struggling financially can be very difficult. The thought of what will happen if you CAN’T make your mortgage payments and you lose your home, is also a difficult thing to live with on a daily basis. Unfortunately, many American’s homes are in jeopardy as they fall deeper and deeper in to debt. If you’re in this position and aren’t sure what solutions exist to help you save your home, we have some suggestions.
What Can Be Done to Save Your Home
There are more than a handful of things which can be done to try and save your home. Everything we suggest is going to require effort, sacrifice, and some knowledge on your part to be proactive in avoiding foreclosure. Believe it or not, the bank doesn’t want your house. That being said, they also must work within certain parameters in terms of what options they have to offer to homeowners. But in general, here are some options to consider:
Reinstatement – When you’re behind on your mortgage, you could consider contacting your mortgage company to negotiate a lump sum payment of your past due amount by a specific date. Something like this generally works for people whose financial struggle is temporary and they have access to a lump sum of cash.
Repayment Plan – Again, the bank doesn’t want your home and they may be willing to work with you to come up with a repayment that would allow you to pay back the amount you are past due on, over time. A repayment plan may be beneficial to someone who has only missed a few payments.
Forbearance – With forbearance your payments are suspended for a period of time. When you resume payments, your loan is either extended for a longer amount of time or additional partial payments for the time you were in forbearance are added to your payment.
Loan Modification – In some cases, you can negotiate a loan modification with your mortgage company in which you agree to modify the terms of your loan. Items you can negotiate for include reducing the interest rate, extending the term of the loan, or adding missed payments to the loan balance. A loan modification agreement may also allow you to reduce the amount of money you owe by forgiving, or cancelling, a portion of the mortgage debt.
Bankruptcy – In most cases, we can save your home with a Chapter 13 bankruptcy plan.